Yair Lapid had hardly settled into his Knesset seat before the Finance Ministry declared war on the ultra-Orthodox, on the Histadrut, on the monopolies – in short, a world war. What the father Tommy began with Netanyahu in 2003, the well-disciplined son is completing ten years later, fulfilling his father’s directives. Tommy Lapid has passed away, but Netanyahu has received renewed strength to continue the process he began as finance minister in Ariel Sharon’s government. Netanyahu paid a heavy price when he lost the general elections to Ehud Olmert, but a man like Bibi doesn’t despair – especially when another Lapid arrives to restore his self-confidence.
The “open skies” agreement (increasing foreign competition in the airlines industry) was the real test. Ynet and Army Radio, Iran, Syria and Hezbollah, Avigdor Lieberman’s trial, Nochi Dankner’s tribulations – they are all troublesome and cause us to despair. But Netanyahu and Lapid are promising us a break from such things via cheap flights abroad. They also promise cheap electricity, cheap phone calls, and cheap cars. When their world war ends, everything will be cheaper. All we need to do is privatize the Israeli economy and open it up to competition, and all will be smooth and efficient.
Cheap things cost a fortune
The problem is, cheap things are expensive. Netanyahu privatized the pension funds, and workers’ payments now flow straight into Dankner’s hands. He privatized the health services, and now reasonable health care and medicines are impossible to get without some kind of “complementary” private health insurance. He privatized welfare, and the number of those living in poverty grew. He privatized the dairy concern Tnuva and the price of cottage cheese rose. He also privatized Israel’s national shipping company Zim and handed it to the Ofer brothers, and since then it’s been suffering losses. Ten years have passed, and social inequality rates in Israel are now among the highest in the western world – but Bibi and Lapid continue their self-appointed task as if nothing has changed and the Israeli public is stupid.
Cheap things cost a fortune because behind every privatization and every move to open the market to competition lies the principle of “efficiency”, which means reduction of personnel, which means unemployment. For example, in El Al, like other airlines, some 82% of expenditures are fixed costs such as fuel and ground services. The remaining 18%, the cost of wages, is where cost-cutting measures can be implemented. Competition is between those who manage to get more out of fewer workers for lower wages. Thus El Al will cut back on its workforce by one third, and – in simple terms – some 2000 workers will be sent home.
The aim is to obtain cheaper workers, and competition between workers is a cruel game. Nobody can compete with Chinese workers. China is becoming an economic superpower because it hires its workers at slave wages. In this way, entire industries have been wiped out around the globe, particularly in the US but also in Israel. And when it is impossible to “relocate” factories outside the national borders, foreign labor is imported to replace local workers. This is what has occurred in the construction industry, agriculture and homecare, under the pretext that Israelis don’t want to do this kind of work.
It is clear that the first step after privatization is dismissal of workers, and new firms make certain that their workers have no union support. Thus the minimum wage has become, in practice, the maximum. One must work in one and a half full-time positions to earn the average wage. Industrial workers labor 12-hour shifts at minimum wage just to reach NIS 8,000 a month ($2200). And to complete the picture we need to add contract labor, free-lancers, and those with “personal” contracts – all lack employment security and protection of their rights. This is the sorry situation in which some two million workers in Israel find themselves.
Who isn’t good at management?
The Finance Ministry asserts that the government isn’t good at management, so we need professionals with initiative who are willing to take risks in order to lead the economy. It also asserts that dismissing workers creates new jobs elsewhere. For example, the “open skies” agreement will lead to the dismissal of some 2000 El Al workers, but also to an increase in tourists, which will create thousands of jobs in the tourist industry. The textile industry was also wiped out by the removal of import duties, backed by the claim that this would lead to growth in the industry within a decade. But the truth is, growth benefited only a few and the vast majority does not benefit at all. Meanwhile thousands of women in the peripheral regions, in the south and in the Arab towns in particular, became unemployed.
After years of trial, it’s worth asking how the tycoons have proved they know how to manage the economy better than the state. Zim is sinking under debt and is requesting a write-off; Dankner is facing bankruptcy after taking control of an empire of some 40,000 workers; Tshuva, Leviev, Zisser, Ben Dov and others took risks with public money and refuse to pay for losses out of their own pockets. Teva, meanwhile, makes profits of billions, yet pays zero tax. But when they are nevertheless asked to pay something for the sake of the homeland they take umbrage and move to London, the favorite tax haven.
Lapid tells us there are three factors responsible for the harsh social situation: the ultra-Orthodox, the Arabs, and Alon Hassan, chairperson of the Ashdod Port workers’ committee. Yes, apparently Alon Hassan is the real villain, and Bibi and Lapid have declared war on him too. Hassan likes to eat steak, he employs his own family at the port, he earns NIS 30,000 per month, and he, it seems, is the main cause of the high cost of living. Hassan and the other large workers’ committees are public enemies, which justifies a policy of “targeted liquidation.” Hassan and his ilk must agree to streamlining, viz. privatization, the transfer of the port to some tycoon or other. He must also agree to the employment of contract workers instead of regular workers. Thus, instead of Hassan and his friends earning NIS 30,000 per month, some capitalist will pocket millions – after all, the capitalist deserves it, he took the risk at the expense of the public.
The principle is clear: all those earning NIS 30,000 must be wiped out to make jobs for those who earn NIS 5000. The profits from Ashdod Port, the Electricity Corporation, the gas and Dead Sea industries will flow into the pockets of a few individuals while the status of workers continues to decline. At least in one area workers and tycoons are equal: neither pays tax – the former because they don’t earn enough; the latter because they “earn” too much. The results are clear – the state loses revenue, public services are retrenched and privatized, poverty increases, and no social safety net remains to shore up the less fortunate.
Despite the huge social protest of summer 2011, the tycoons, settlers and their representatives in the government continue to scorn the public. The economic system is bankrupt. It is built upon lies, fraud, and the destruction of the democratic process.
Lapid’s war is not the struggle of working people but the war of the tycoons. Ishay Davidi, the tycoon preparing to take over El Al and send so many workers home, is a significant contributor to Lapid’s political party. So when Lapid breaks El Al workers and declares war against them, who is he really acting for? For the workers? Or for those who funded his path to the Knesset?
– Translated from the Hebrew by Yonatan Preminger