Unlike the US, Israel lacks unionized crafts. History dictated otherwise; Israel formed suddenly in 1948 when the British pulled out of Palestine. The task of building the new country fell to fewer than 1 million inhabitants, including concentration camp survivors, most of whom had never before picked up a hammer or shovel. By trial and error, they acquired construction skills. But after the 1967 Six-Day War and the capture of the West Bank and Gaza, Israel absorbed more than 1 million Arabs. Willing to work for low wages, they were eagerly grabbed by contractors, leaving few opportunities for Jews in the building trades.
INTIFADA. With few skills and tools, many of these Arabs still transported materials by donkey and knew how to mix concrete only by hand. Construction quality deteriorated and productivity decreased by 2% annually, according to figures from the Israel Central Bureau of Statistics. Eventually, the Palestinians acquired skills. But when the Intifada uprising began in 1987, Israel began closing its borders to Arab workers. Contractors replaced them with foreign workers by the tens of thousands.
Seducing them with wages of $300 per month, Israeli contractors sponsored the arrival of workers from eastern Europe, Turkey, Africa, Asia and elsewhere. No one checked on their skills or previous experience. Israeli construction projects became a babel of languages and superintendents began resorting to sign language to communicate instructions.
Otherwise, contractors pay little attention to the needs of the foreign workers. Typically, they are housed 10 to a room in squalid quarters. When a construction project is finished, the labor contractor often vanishes, leaving them no place to go other than to shanty towns rife with crime, prostitution and desperate needs for health care.
Despite the low wages and comparable costs of material, the same building in Israel costs 25% more than in the US and takes three times longer to build. Israel's construction quality is horrific and local contractors find it increasingly difficult to meet the high standards demanded by international developers. Clearly, a building industry without organized, trained labor is no Garden of Eden.
The US construction industry owes a great deal to union organizers of some 70 years ago and to the subsequent passage of the federal Davis Bacon Act and similar prevailing-wage legislation in the 50 states. The labor movement in the US acted wisely by insisting on the establishment of apprenticeship training programs for craft workers. Israel needs to organize its craftworkers as well. But the unstable situation makes that unlikely, even as Israeli contractors muddle through their existing projects.
For example, at the $500-million expansion of Ben Gurion International Airport in Tel Aviv, you can find construction workers who, not too long ago, were using donkeys to pull plows through fields in China. Overwhelmed by the United Nations of workers, some contractors at the airport are failing. Before filing for bankruptcy last November, Ceylan Instaat Ltd., a Turkish/ Israeli contractor, was constructing the new airside terminal for $70 million. Originally scheduled for completion next year, the entire expansion project probably will not be ready until 2003 at least, according to the Israel Airport Authority.
But though the project badly needs an organized labor force, and though unions enjoy considerable clout in other sectors of Israel's economy, the country refuses to accept help from the Building Trades Dept. of the AFL-CIO, which wants to bring modern apprenticeship training programs to Israel and integrate these into government-run craft training schools. Israeli training is so backward that young carpenters still learn to make formwork with old 2x4s tied with metal wire. Yet the Israel Ministry of Labor, which is in charge of worker training, prefers to focus on collecting more fees by issuing permits to contractors to bring in more foreign workers.
STATUS QUO. Landlords also like the status quo as they rent out substandard housing to the foreigners at high prices. Contractors simply accept the labor inefficiencies, telling project owners that slow work and poor quality are "just the way it is in Israel." And many young unemployed Israelis, frustrated by the current unemployment rate of 10% but unwilling to work dirt-cheap, end up leaving the country.
After the renewal of the Intifada last year, President Clinton failed to forge a comprehensive peace deal. President Bush now appears cautious. As a result, the situation probably will deteriorate further, and Israel's addiction to cheap labor will continue to feed on itself.
People often complain that unions run up costs and stifle the construction process. They--and the industry's open-shop movement in the U.S.--ought to learn from our terrible history.
he worsening violence in Israel all but guarantees its continued dependence on imported construction labor. The awful consequences provide a lesson for U.S. contractors who employ a low-paid, poorly trained work force.
