A Million Israeli Workers Strike As Peres Proposes to Create Jobs
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A Million Israeli Workers Strike As Peres Proposes to Create Jobs

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One million Israeli workers staged a two-hour warning strike Sunday to protest rising unemployment, as the Cabinet debated a plan put forth by Finance Minister Shimon Peres to create new jobs.

Peres’ proposal, calling for new aid to ailing factories and $100 million in spending on the national infrastructure, is an effort to reverse and unemployment rate that has risen as high as 9.7 percent, the worst since 1967.

A meager 1.6 percent increase in the gross domestic product last year, $600 million in exports lost to the Palestinian uprising and a $75 million military supplement budgeted Sunday to fight the uprising have created an emergency atmosphere, which Peres hopes his plan will confront.

The demand for immediate government action to reverse the rising jobless rate was the message of the strike, which took place between 11 a.m. and 1 p.m.

Leaders of the Histadrut labor federation called the work stoppage “unique in that the workers were not demanding higher wages or better working conditions,” but relief for the estimated 140.000 Israelis out of work.

The strike, covering all national and local government workers, as well as employees of the Jewish Agency for Israel, was virtually complete in the public sector, but spotty in private enterprises. Shopping centers were open and did a thriving business with the idle workers.

During the strike, some 5.000 local trades union representatives held a mass demonstration in front of the Knesset.


What makes the current economic crisis one of Israel’s worst ever are the anguished calls for change from the bottom, as well as the top. Unemployment is concentrated within the weaker segments of Israeli society, particularly in the development towns.

Several unemployed workers have committed suicide or, like a 46-year-old single mother of two, are considering it. She told Israel Radio with unnerving calm that her only hot meal is a scrambled egg and that she did not believe she would live to see next year.

“Dear God, this is an emergency,” Aliza Tamir, chairwoman of the Histadrut employment committee, said during Sunday’s protests “How can they be so indifferent?”

By “they” she referred to the country’s economic leaders, including Peres, who as Labor Party leader is nominally in control of Histadrut.

Peres’ response to these appeals is a plan to Finance projects to construct new roads and schools, with the hope of creating 1.000 new jobs.

Peres also is calling for liberalizing tax legislation to encourage corporate mergers, financial aid to struggling firms, tax exemptions and bank loans.

Measures will be taken to offer incentives for the unemployed to seek out jobs actively and not suffice with unemployment compensation.


The catch to the plan is that it presents Israel with the traditional tough choice between unemployment and inflation.

Peres said last week that the additional burden of his plan on the national budget would be “marginal.”

But Michael Bruno, the governor of the Bank of Israel, warned that a diversion of $200 million from the original budget would speed up inflation, which was successfully curbed in the past few years at great effort.

The crisis also revived the traditional debate between the libertarian school among economists, which advocates minimum government intervention in the economy, and the socialist approach, which believes government spending is a panacea for the nation’s ills.

Peres’ approach seems intended to mollify both camps. He would like to create the impression that the government is willing to invest enough in order to stop the growth of unemployment, and yet avoid monstrous inflation.

Paradoxically, there are indications that better times lie ahead for the Israeli economy.

Some experts, including the director general of the Ministry of the Industry and Trade, say that unemployment is the unfortunate but necessary cost of streamlining the economy for the 1990s.

But in a lengthy interview on television last week, Peres did not sound hopeful. To make matters worse, Histadrut elections are coming up and the Labor leader knows full well that, for the first time, his party faces the real danger of losing its grip on the powerful trade federation.

Israelis have met the current crisis with a strain of black humor. Shlomo Maoz, the Jerusalem Post’s economic analyst, wrote last week that there was no reason to worry that the unemployment rate would hover around 10 percent for long. If Israelis can’t find jobs, he said, they’ll simply leave the country.

(Contributing to this report were JTA correspondents David Landau in Jerusalem and Hugh Orgel in Tel Aviv.)

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