Why is the problem of strikes so much worse in Israel than in other industrialized countries? One answer is Israel’s highly centralized economy. Since the incentive to strike is much greater in the public sector, the size of this sector in Israel—constituting about 55 percent of the country’s economic activity, the highest in the industrialized world—multiplies both the frequency and magnitude of strikes. The reason the incentive to strike is so much greater in this sector is simple: In private companies, workers are deterred by several factors, ranging from the fear that extensive strike damage could push an already ailing company to fold, throwing everyone out of a job, to the certainty that they will at least have their pay deducted for the days they miss. In the public sector, however, these dangers rarely apply. Government ministries and agencies are not going to close for lack of profitability, and even the danger of individual dismissals is minimal, since all government employees receive tenure after a relatively short time on the job (anywhere from six months to four years). And while docking pay is possible in theory, in practice most public-sector labor sanctions do not end until the government agrees to forgo this privilege almost entirely.³³ A typical settlement resembles that reached by striking municipal unions in November 2002, in which workers lost one day’s pay for a strike that lasted nine days.³⁴

In Israel, moreover, most public services are provided by government authorities and state-owned monopolies, and are therefore not subject to the forces of a competitive environment. In countries with several independent ports, for example, port workers are deterred from striking by fear that business will shift to a rival port, thus leading to dismissals at their own. In Israel, however, where all ports are run by the same government authority, port workers are linked together by a single collective bargaining agreement. The monopolistic employer thus produces a monopolistic union: When one port strikes, they all do, leaving customers with no way to get merchandise into or out of the country. It is therefore no surprise that strikes have become much less frequent in the few public-sector areas in which competition has been introduced. Television blackouts, for instance, were common in the days when the country’s only station was state-owned, but have virtually disappeared since the establishment of a second, competitive channel a decade ago.

Because public-sector workers are practically immune to penalties, they can strike over issues that private-sector workers would find hard to fathom. One of the most common is a demand for real wage increases during periods of deep recession, when many private-sector workers are suffering either layoffs or pay cuts. The wave of strikes in November 2001 is a good example. According to data published in October and November of that year, the GDP fell 2.8 percent in the third quarter after a 1-percent drop in the second; meanwhile, unemployment had jumped to 9.3 percent in the third quarter from 8.1 percent in the second.³⁵ All of this growth in unemployment occurred in the private sector, which lost 73,000 jobs from April 2001 to January 2003; the public sector took on 46,000 new workers during this period.³⁶ Furthermore, the entire public sector (with the exception of municipal workers) had been granted a 3.6-percent raise just ten months earlierׁan increase greater than the inflation rate for 1999, 2000, and 2001 combined.³⁷ Yet despite the benefits of job security at a time of growing unemployment, and a real wage increase at a time when private-sector wages were falling, each of the unions that struck in November 2001—dock, customs, and airport workers; Labor Ministry, Land Registry, and National Insurance Institute personnel; and university professors—did so in support of a demand for an additional wage increase. The professors, for example, wanted a 16-percent raise, and Labor Ministry employees wanted 7.5 percent, even though inflation that year was just 1.4 percent.³⁸

 

In addition to the incentives resulting from a centralized economy, strikes are also encouraged by the anomalies of Israel’s legal system. One example is Article 24 of the Collective Agreements Law, which states explicitly that “neither a labor organization nor an employers’ organization shall be liable for compensation for violating its obligations under a collective agreement.³⁹ Though the phrasing may sound evenhanded, in practice it has meant that private-sector employers cannot sue unions for violating the no-strike pledge that is standard in almost every collective agreement, while public-sector employers, for whom thisproviso is mitigated slightly by the Settlement of Labor Disputes Law, can do so only under limited circumstances.⁴⁰ The fact that unions can violate their no-strike pledge without risking a lawsuit significantly reduces the value of such a promise. Thus,from 1970 to 1980, for instance, more than two-thirds of all strikes erupted while a collective agreement containing a no-strike clause was in force.⁴¹

More important, however, is the almost complete absence of direct legal limitations on the right to strike, of the kind that exist almost everywhere in the industrialized world. Some countries, such as the United States, Canada, and Japan, have banned strikes outright in key public-sector industries, referring all labor disputes to binding arbitration instead.⁴² In Israel, however, such a ban exists only in one narrow area of the public sector: The police and other security services.⁴³ Though the idea of applying such a ban to the entire public sector has been considered occasionallyׁin response to a wave of strikes in 1976, for instance, five different bills calling for public-sector strikes to be replaced with binding arbitration were submitted by private Knesset members, and the government even considered submitting such a bill itself⁴⁴ׁno proposal to this effect has ever passed Israel’s parliament.

A common alternative to an outright ban on public-sector strikes is legislation permitting them only if they are approved by a majority of a union’s members voting in a secret ballot. This would seem to be a self-evident restriction: Since it is the workers who are most directly affected, they should be able to decide for themselves whether the potential gains are worth the risks. In Israel, however, each union’s “workers’ committee” the handful of people on the union’s executiveׁhas the power to decide whether to put the union’s thousands or tens of thousands of members on strike, regardless of the workers’ views. Then-Prime Minister Benjamin Netanyahu pledged to introduce legislation to rectify this situation in 1998, but he never followed through; nor has he, as finance minister, kept a similar pledge made during the May 2003 strike.⁴⁵ According to media reports, a position paper prepared by the Finance Ministry in November did propose legislation conditioning the right to strike on a vote by union members. But as of this writing, and despite a new wave of crippling work stoppages in the public sector, the government has yet to submit legislation of its own on the subject, and it agreed to support the preliminary reading of a private member’s bill to this effect only in exchange for a pledge that the bill would be frozen after the vote.⁴⁶

The lack of legislative controls, however, is only part of the picture. Equally troubling is the behavior of Israel’s labor courts, an autonomous branch of the judiciary dedicated solely to settling individual and collective labor disputes. These courts have consistently demonstrated a pro-union bias, extending the right to strike well beyond what is implicit in the legislation, or what is accepted in other countries. Mekorot workers’ “right” to turn off the country’s water supply, for instance, was upheld explicitly by the Tel Aviv Labor Court when the company sought a restraining order to end the stoppages. When the company appealed, the National Labor Court lent implicit sanction to the practice by permitting it to continue for another four days while it tried to mediate between the parties.⁴⁷

Indeed, because of these courts, Israel may be the only industrialized country in the world in which the right to strike is protected even when the strike explicitly violates the law. For example, one of the few existing legal restrictions on strikes in Israel is the requirement of a 15-day cooling-off period between the declaration of a work dispute and the start of a strike. Yet the labor courts have overruled this law as a violation of the workers’ right to strike. In December 1997, for instance, the Tel Aviv municipality sought a restraining order against the city’s garbage collectors, who had walked off the job without waiting for the end of the cooling-off period. The Tel Aviv Labor Court granted the order, on the grounds that the strikers clearly violated the law. But in a 2-1 decision, the National Labor Court overturned this ruling, declaring that the workers’ right to strike took precedence over the law. In the majority opinion, the court’s president and vice president, Steve Adler and Elisheva Barak, wrote: “The Labor Court is not obligated to issue a restraining order against strikers in every case of an unauthorized strike. It has discretion to uphold the freedom to strike in the event of a unilateral change in the nature of labor relations” in this case, the municipality’s decision to outsource some of its garbage collection.⁴⁸ In fact, the labor courts have even permitted strikers to ignore restraining orders that they themselves issued, as in another case that year, when public-sector workers participating in a Histadrut-led general strike refused to work, in defiance of restraining orders issued by the Tel Aviv Labor Court. When the government appealed to the National Labor Court, Adler, rather than penalizing the unions for violating a court order, summoned Finance Ministry representatives to his office for a marathon negotiating session on the workers’ grievances.⁴⁹