A Reformed Histadrut (part 1): Israel’s Labor Movement Adapts to Changing Work Force, Ideology

The Israel of the bronzed pioneer in shorts and peaked cap, engraved in the heart of every old Zionist, is dead and gone.

The dream of an egalitarian, socialist society, with all sharing equally in the fruits of their labor, has all but evaporated.

These are not the pronouncements of right-wing ideologues or anti-Israel propagandists.

They are the words of top leaders of the Histadrut, the giant labor federation that built the framework of the nascent Jewish homeland in the decades before the establishment of the State of Israel.

Nothing quite brings home to an American visitor the gulf between the old image and the new reality as a few days with the young, new leadership of the Histadrut.

And nothing illustrates the transformation as sharply as the changes in the Histadrut itself during the last two years.

These changes have brought about a phenomenon perhaps unparalleled in the global annals of bureaucracy: The picture of a powerful apparatus, a veritable state-within-a-state, relinquishing most of its power and offices of its own volition.

In its heyday, the Histadrut, led by David Ben-Gurion in its formative years in the 1920s, was much more than a muscular trade union.

It ran a social service network that encompassed 70 percent to 90 percent of the entire Israeli population. It controlled 30 percent of the country’s economy through its ownership of industrial conglomerates, construction companies, banks and housing cooperatives.

The Histadrut was a powerful political force through its close identification with the Labor Party, and even it had its own “foreign service” of emissaries posted to developing nations.

Although Israelis acknowledged the Histadrut’s vital role in the creation of the state and in the immediate post-independence decades, by the 1980s, most of the public viewed the federation as a bloated, corrupt and incompetent bureaucracy.

In 1994, a rebel faction led by the youthful and charismatic Haim Ramon ousted the old guard of an organization that he delighted in describing as a “beached whale” or “dinosaur.”

Ramon is now minister of the interior in the government of Prime Minister Shimon Peres.

In short order, Ramon set about slashing Histadrut’s billion-dollar debt by selling off its industrial enterprises, firing more than half its own employees and drastically reducing support to its social service network of hospitals, homes for the elderly, youth villages and schools.

The most dramatic impact in the daily lives of Israelis came with the Histadrut’s separation from its Kupat Holim Clalit, the huge health insurance network covering most Israelis.

Before, applicants for Kupat Holim first had to become members of the Histadrut.

With the passage, on Ramon’s initiative, of a government – administered national health service, however, anyone could enroll in Kupat Holim without the prerequisite of Histadrut membership.

In one fell swoop, Histadrut membership dropped from 1.8 million members to 200,000, though the labor federation has since made up some of the lost ground through intensive organizing efforts among nonunion workers, Amir Peretz said in an interview.

Peretz, a Ramon lieutenant, was elected chairman of the Histadrut earlier this year.

Born in Morocco, the 44-year-old ex-farmer became a Knesset member in 1988.

Peretz’s close aide is Jacques Neriah, head of the Histadrut’s international department. Neriah, 45, who was born in Lebanon and speaks five languages, in an interview detailed his criticism of today’s Israeli society and offered his vision for the future.

“We haven’t yet faced our own sicknesses,” Neriah said, citing the growing disparities within Israeli society. “We must narrow the chasm between the rich and the poor. The best country to live in is where the differences between rich and poor are the smallest.”

Neriah and his Histadrut colleagues are also deeply concerned about the growing importation of foreign workers, mainly to fill menial jobs. They now number 100,000, represent 7 percent of the labor force and are often exploited and paid “wages of misery,” Neriah said.

If not enough Jewish workers can be found to fill the jobs, “I would rather give the work to Palestinians,” he added.

Another concern, familiar to American labor unions, is relocation. In Israel, the concern is about relocation of industries to Jordan and Egypt to take advantage of much lower wages in those countries.

If the old Histadrut, and the old Israel, are gone, what are the visions for the future?

The most basic requirement is “a deep commitment to peace, a real peace, the real integration with our neighbors,” Neriah said.

As a step in that direction, the Histadrut signed a cooperative agreement last year with Palestinian labor unions.

Neriah is now working toward a Mediterranean Federation of Trade Unions that would include unions in Israel and the Arab countries.

“However, our single most important relationship remains with the AFL-CIO in America,” Neriah said.

The second commitment is to a society based on social justice, once the primary goal of the Histadrut founding fathers.

But “we must also export and be competitive in a free market,” Neriah said.

Peretz, Neriah and their colleagues speak of an Israel evolving into a true social democracy, but hardly in the ascetic style preached by Ben-Gurion and the early pioneers.

“Poverty is not a virtue,” observed one Histadrut official. “To be a socialist, one need not be poor.’