Shalem College
September 8, 2016

Students Bring Their Call for Free-Market Reforms to the Knesset

Students Bring Their Call for Free-Market Reforms to the Knesset
Shalem junior Alon Tuval, CEO of the Shalem-student-founded free-market advocacy organization Tacharut, speaking at the Knesset on July 4.

It is perhaps fitting that Tacharut (“Competition”) sounded its first public battle cry against the outsized power of the Israeli labor unions on July 4th: For the Shalem students who founded the free-market movement earlier this year to advance the rights of non-unionized employees and reform the public sector, the challenge seemed every bit as insurmountable as that faced by the Americans in their battle against the British—or, in more Jewish-Israeli terms, the one between David and Goliath.

Addressing the first-ever Knesset conference on the subject of non-unionized workers’ rights, Shalem junior and Tacharut CEO Alon Tuval argued that the current legal reality, in which the courts consistently rule in favor of the country’s labor federation, has grave consequences for the Israeli public at large. “The power balance between a given union and an employer—including Israel’s biggest employer, the State of Israel—leans dramatically toward the unions’ side,” explained Tuval. In turn, these unions “act de facto as a powerful cartel,” preventing called-for reforms to the public sector. The Knesset conference, which was attended by several dozen MKs and senior economic figures, aimed to be a first step in the path toward change. Hosted by MK Sharen Haskell, the conference also featured Dr. Michael Sarel of the Kohelet Policy Forum, who presented research on the economic influence of labor unions on Israel’s public administration.

Despite the conference’s subject, for Tuval and the other Shalem students who founded Tacharut, rising seniors Dvir Schwartz, Shahar Zohar, and Hadas Ofir, the ultimate goal is far bigger than the rights of non-unionized workers to negotiate terms for themselves. “The main problem is that the labor unions…are preventing reforms to the public sector.” For instance, said Tuval, “the 1996 reform to the Israeli Electric Corporation, which could have opened the electricity market up to competition, was postponed on account of the labor unions.” Attempts to increase efficiency at the Airports Authority and the Israel Lands Authority met with the same, thwarted fate. “[These reforms] could have saved the public purse a large amount of money,” Tuval continued. “The legislators entrusted with the public interest need to be made aware of the true reach and impact of the labor unions, and called upon to make good on the government’s promise to make reforms to the present, dramatically unbalanced dynamic.”

For Tacharut co-founder Zohar, the first, critical step toward achieving this ambitious goal is changing the public’s perception of the function and effect of the labor unions in Israeli society. “Currently,” he explains, “the public discourse about the labor market in Israel is shaped by the Histadrut’s and the labor courts’ point of view, whereby they and they alone have the interests of the country’s ‘weak’ workers in mind. Yet this discourse is misleading, as it is in truth the Histadrut and the labor courts who promote the interests of the ‘strong’ workers at the expense of the weaker majority. One of Tacharut’s main goals for the future,” Shahar concludes, “is to change this public discourse, so that the pressure to change this situation will likewise increase.”

Tuval seconds Zohar’s determination, pointing out that the very existence of this conference was itself a giant leap forward for Israel; after all, he says, “MKs willing to take a stand against the Histadrut are rare.” He concludes optimistically that while the labor unions’ dominance of the conversation on workers’ rights is strategic in nature, so will Tacharut’s and its partners’ approach to countering that dominance be equally strategic. This conference, which introduced a new way of understanding the union-employer relationship in Israel, was for Shalem’s students a fitting start.