Public employee unions have a new international villain to add to their growing list: Israeli Prime Minister Benjamin Netanyahu. Bibi’s government is embarking on a fight to break the monopolizing power of Israel’s formidable port unions, the “gatekeepers for Israel’s international commerce,” that would make Wisconsin Governor Scott Walker and Mexican President Enrique Nieto welcome him to their company. Reuters reports:
The port unions – possibly the most powerful in the country with just 2,400 workers earning double the average public sector salary – are likely to be severely weakened and may have to make concessions or face layoffs.
The unions will not budge, [head of the Ashdod union Alon Hassan] said: “I am protecting the workers’ agreements that have been signed for tens of years. Fanatically. I am not open to unilateral attempts to breach such agreements.”
Articulating the government’s position, Finance Minister Yair Lapid said simply: “Let there be war.”
The government wants to introduce private piers opposite the country’s two main, union-controlled ports at Ashdod and Haifa, hoping that service will improve and prices will drop. With a mandate from January’s elections to fix the economy and little sympathy for unionized public employees from Israel’s struggling middle class, Bibi’s government looks determined to crack the institutions keeping competition impossible and the quality of services very low. The port unions are only the beginning: Bibi also has the airlines, car importers, and television operators in his sights.
People often forget that most of Israel’s founders were socialists and that strong unions and state enterprises have deep roots in the Israeli economy. But these decades-old institutions are taking a toll. In Israel as in many other countries, the legacy policies and institutions of the blue era are increasingly expensive and get in the way of economic growth and necessary reforms.
Israel has less and less ability to maintain these old arrangements. But the country’s unions, cartels and monopolies won’t give up without a fight.
[Haifa port image courtesy of Shutterstock]