Abstract
The Israeli doctors’ and social workers’ campaigns of 2011 had many characteristics in common, but very different results. This article asserts that the differences stem from the different modes of privatization in the two sectors which reflect the importance of each sector in the neoliberal capital accumulation regime, which in turn affects the outcome of the workers’ struggles. While neoliberalism may undermine organized labour in general, it has uneven effects, benefiting some workers and undermining others. Thus we should pay attention to how privatization is implemented in different public sectors within the same country to better understand ‘actually existing neoliberalism’.
Introduction
The retrenchment of the welfare state and the transformation of public services have been among the many changes linked to neoliberalization. Key policy trends affecting the public sector have been privatization, marketization and the introduction of competition, now considered even more crucial by governments struggling under deficits and keen to promote austerity measures. As Peters (2012: 210) notes, among parties associated with ‘Third Way’ politics there is a ‘widespread consensus that expenditures on public services are a burden on the “productive” sectors of the economy and that tax cuts and “new public management” [NPM] reforms are necessary for growth’. Representatives of the NPM approach advocate ‘a shift from hierarchical control to markets, leaner organizational structures, the use of private–public partnerships and contracting out to the private sector’ (Flecker and Hermann, 2011: 524). Privatization, it is thought, lowers operating costs and enhances efficiency (Peoples and Wang, 2007).
Many have recognized that privatization is a multi-faceted project and just one of a range of mechanisms that can be used by governments promoting a neoliberal agenda. The way neoliberalism is implemented, and more specifically, the way privatization is used as part of the neoliberal project, varies considerably from state to state (Hermann and Flecker, 2012; Schulten et al., 2008). As Prosser and Moran (in Moran and Prosser, 1994) note in their conclusion to a collection of studies on privatization in Europe, national settings matter: the ‘starting point’ from which regulatory regimes approach the process affects policy choices; and regulatory ‘styles’ affect regulatory frameworks, which in turn affect the way privatization is felt ‘on the ground’.
Nonetheless, certain policy trends are common to a wide range of countries, and there is little disagreement over one outcome in particular: privatization and liberalization have negatively affected employment and working conditions in the public sector (Schulten and Böhlke, in Hermann and Flecker, 2012; Schulten et al., 2008), undermining union density, centralized collective bargaining and coverage of collective agreements (Flecker and Herman, 2011: 532–534). The result for workers, it is claimed, has generally been job loss, labour market segmentation, the weakening of organized labour in the public sector and the fragmentation of labour relations (Peters, 2012). As Gill-McLure (2007: 42) argues, tools such as compulsory competitive tendering (CCT) and NPM methods depoliticize labour management decisions and lead to job insecurity, labour intensification and deskilling. ‘[T]hese policy and administrative developments have substantially transformed the State as an employer and negatively affected public sector employment, compensation, and full-time work’ (Peters, 2012: 210).
Public sector workers and their representative organizations have responded in various ways to this downward pressure on wages and deteriorating employment terms. The strategies and tactics adopted (and the issues involved) have been investigated by the union revitalization literature (e.g. Frege and Kelly, 2003; Heery, 2002; Turner, 2005; Voss and Sherman, 2000). In the public sector in particular, unions have targeted privatization itself through political campaigns, sometimes demanding renationalization to strengthen the public sector or strong sector-wide regulation to defend jobs, pay, working conditions and employees’ participation rights (Schulten et al., 2008: 305–306). Gill-McLure (2007: 43–44) notes that public sector employees can emphasize the uniqueness of their labour as producing use-value, which is also linked to the development of a caring, social, collective element – the public service ethos. As Greer (2008) notes in relation to a struggle in Hamburg hospitals, this can involve a direct appeal to the public: as traditional channels to political influence (including links to social democratic or labour parties) have broken down, unions turn away from social partnership and towards mobilizing citizens around the protection of public services, giving rise to social movement unionism. In a study of the 2002–2004 struggle of non-medical hospital staff in British Columbia, Canada, Camfield (2006: 40) suggests that even where unions feel powerless, strikes can be effective as ‘rallying points for popular resistance to neoliberalism’.
However, while the regulatory and institutional frameworks of different countries are acknowledged as affecting the implementation of privatization and the response of organized labour to liberalization policies in the public sector, there are few comparisons between sectors within the same country. Flecker and Hermann’s study (2011) is notable for doing just that, covering four sectors in six countries (see also Hermann and Flecker, 2012), but here too the implications for working conditions and the power of organized labour are very similar between the sectors they investigate.
In this context, the Israeli doctors’ campaign and the Israeli social workers’ campaign raise an interesting issue: both campaigns took place in the public services in the same year, and both sectors are seeing their professions undergo creeping privatization; moreover, there were similarities between the struggles, with both groups of workers expressing their disappointment in their representative organizations and setting up new organizations to channel and provide a framework for the workers’ desire to participate and make their voice heard. However, there were also significant differences, including the ‘atmosphere’ of the struggles, the choice to remain or break away from the union, the weakening or strengthening of organized labour in each sector and the state’s approach to this, and the dissimilar outcomes of the collective bargaining process.
I propose that the differences are due to the different ways privatization is implemented in different sectors, which in turn affects the power of organized labour in different ways. This, I assert, reflects the different levels of importance of the two sectors in the neoliberal capital accumulation structure, and in turn directs our attention to the uneven application of sometimes apparently contradictory policies pursued by neoliberal governments. As Peck and Theodore (2012: 178) note, while neoliberalism as a kind of world-embracing Zeitgeist, with a vague set of guiding principles, can be imagined, it is ‘perplexingly difficult to operationalise in methodological terms’. Critical scholars who have tried to define it or draw out some general characteristics agree that the state is a central player in imposing ‘entrepreneurial freedoms within an institutional framework characterised by private property rights, individual liberty, unencumbered markets, and free trade’ (Harvey, 2007: 22), but the mechanisms and ground-level policies which push neoliberalization forward appear contradictory, improvised, opportunistic, often less than successful, non-linear, and far from inevitable (see Goldstein, 2012; Harvey, 2005; Hilgers, 2012; Kalb, 2012; Schmidt, 2009; Wacquant, 2012). As Peck and Theodore (2012: 178–179) put it, neoliberalism ‘displays a lurching dynamic, marked by serial policy failure and improvised adaptation, and by combative encounters with obstacles and counter-movements’.
Thus while a government may hold to the notion that ‘human well-being can best be advanced by liberating entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade’ (Harvey, 2005: 2), we have to ‘pay careful attention … to the tension between the theory of neoliberalism and the actual pragmatics of neoliberalisation’ (Harvey, 2005: 21). We must also, therefore, pay careful attention to privatization as one neoliberal policy option. The Israeli campaigns offer an opportunity to do so in the context of the effects of privatization on organized labour and the labour relations regime.
The following section presents a brief overview of the two workers’ struggles, the doctors’ campaign followed by the social workers’, which had many aspects in common. In the subsequent discussion I compare the two campaigns in the context of their respective sectors, in particular the way these sectors have been affected by privatization. I suggest that the differences between the campaigns, including the ‘atmosphere’, the aspirations of the new organizations and the results of the bargaining process, can be at least partly explained by the different ways privatization has been implemented in each sector and the implications this has on organized labour. The doctors, I assert, stand to benefit from the creeping privatization of their field, due to their critical status within the chain of service provision which puts them in a strong position vis-a-vis the employer (principally the state) and explains why their campaign did not call for an end to the privatization of the health services. This is in contrast to the social workers, whose campaign called explicitly for an end to the privatization of social services. Their profession, I suggest, does not have the potential for profit-making that the health service has, which undermines their strength as employees. Thus where Harvey (2005), among many others, notes the detrimental effects of neoliberalization on organized labour, I propose that we must look more closely at the specific modes of privatization and the particular place each sector has in the neoliberal changes promoted by the government in order to understand the effects of neoliberalization on organized labour.
The doctors’ campaign, 2011
The campaign began at the start of 2011 with negotiations towards a new agreement between the Israel Medical Association (IMA) in its role as the doctors’ union on the workers’ side, and the Finance Ministry, the Health Ministry, the Clalit Health Maintenance Organization (HMO) and Hadassah (an NPO providing mainly hospitalization services) on the employers’ side. 1 Almost from the start there was dissatisfaction among members with the union’s handling of the talks, and a feeling that certain groups within the union were not being fairly represented; anger towards the representative organization grew as a new collective agreement was taking shape, and increasingly strident voices were raised against the union and chairperson.
The structure of the IMA is part of the problem. The IMA is comprised of two main organizations: the state doctors’ organization and the Clalit doctors’ organization. It also includes professional unions according to medical specialization, but these are not part of the representational voting structure. The chair of the state doctors’ organization is deputy IMA chair and the chair of the Clalit doctors’ organization is second deputy IMA chair. This structure can be changed by changing the IMA constitution, but under the existing structure effective opposition within the IMA is almost impossible. 2
Eran Dolev, a former IMA chair, noted that many felt that the chair was behaving autocratically and failing to take into account the interests of various sectors the union was supposed to represent (Dolev, interview). According to Ilan Levine, then wages officer at the Finance Ministry, those sitting opposite the union at the negotiating table also felt that the IMA was not representing all its members, and that the medical residents in particular were absent (Levine, interview). Indeed, it was the residents who led the way in rebellion when hundreds quit hospitals in a wild-cat strike to protest the agreement taking shape, and demonstrated in front of the IMA premises – against their own representative organization.
The challenges to the IMA continued even after it reached an agreement with the state (Collective Agreement No. 267/11) when some 1000 resident and junior doctors submitted letters of resignation in protest. The labour court annulled these resignations as an illegitimate collective step (General Collective Dispute 722-09-11), whereupon about 800 residents submitted individual letters of resignation. A number of senior doctors also announced they would not allow work in hospitals to proceed normally, in solidarity with the residents.
The residents rapidly created an image for themselves as a separate group whose interests had been ignored by their representative body, and called for direct negotiations with employers. Together with the support they won from other dissatisfied groups within the health sector, they succeeded in severely shaking the government and the campaign was charged with an atmosphere of calamity. The public was sure it would be left without medical services, and hospitals made preparations for serious shortages of staff. The trauma of the long 1983 strike (see Ishay, 1986; Modan, 1985) hung over the health sector. As the National Labour Court president noted, ‘We stand today before one of the most difficult moments, if not the most difficult, in the history of the public health system in Israel’ (General Collective Dispute 2376-10-11, para. 1). Similarly, the Supreme Court president said the residents were ‘taking the law into their own hands’, which under normal circumstances would be rejected immediately (HC 8382/11). When medical students at three universities held a large protest near the Prime Minister’s residence in Jerusalem, the Prime Minister said that giving in to the residents’ demands would lead to anarchy (Haaretz, 20 November 2011). However, though the potential disruption to the provision of health services was serious, they had been disrupted to a far greater extent in the doctors’ strike of 1983. The judges’ sentiments in fact reflected something far deeper than just service disruption: a sense of threat to the entire edifice of labour relations based on collective agreements between a representative workers’ organization and the state. Such sentiments were also expressed by journalists and by the various partners to the collective bargaining process (Linder-Ganz, interview; Weissbuch, interview).
The state and courts made every effort to prevent different groups from breaking away from the IMA in an attempt to maintain its integrity, but were forced to offer the residents an alternative framework for collective ‘talks’ (the sides avoided using the term ‘bargaining’). Other groups, less vocal and less willing to take radical steps such as mass resignation (see HC 7569/11), were not recognized. Arbel offers one example: Arbel is an organization of hospital doctors established by heads of hospital departments during the campaign in response to the rigidity of the IMA structure and the perceived autocratic behaviour of its chairperson (Dolev, interview). After residents had accepted negotiations under the High Court’s aegis, the court did not permit representatives from Arbel to take part in the negotiations (it permitted senior doctors to take part, but forbade the participation of anyone associated with Arbel).
The Finance Ministry and Health Ministry agreed to talk to the residents but only on condition that the agreement signed with the IMA would hold and that the talks would not include general issues related to the health services. The state also noted that merely talking to the residents was unprecedented: even if they reached an agreement, what was to prevent another group from emerging and claiming special interests? An agreement was eventually signed (Globes, 7–8 December 2011; TheMarker, 7 December 2011) between the residents, the state and the IMA which offered higher wages for residents for additional days, and some extra grants. In fact, the agreement is like an appendix to the IMA’s agreement, awarding additional benefits to residents.
During talks with the residents, a new idea emerged: to mark a ‘test point’ after 4.5 years. If the sides agree to change the original agreement by this point in time, the changes will be considered a new collective agreement. If they fail to agree after six months of negotiations, they will begin mediated talks for a limited time, followed by arbitration. Furthermore, if this were to happen, the residents would be granted independent (not IMA) representation in some form (Globes, 4–5 December 2011).
In addition to the residents’ rebellion, the IMA was challenged in other ways. Workers’ committees at four large hospitals claimed the IMA had violated the fair representation clause and submitted a fast-track petition to the regional labour court to stop the signing of an agreement (the petition was rejected; Labour Dispute 30184-09-11). The Medical Students’ Union was also involved, and called a strike of studies in solidarity with the residents, threatening it would call an unlimited strike if the Finance Minister refused to talk to the residents (Yedioth Aharonoth, 25 October 2011). In addition, some 200 interns (in their last year of medical studies) went on strike for a few hours in a show of solidarity (Haaretz, 16 November 2011).
Furthermore, as the High Court began hearing the residents’ case, a group of senior doctors threatened to resign. One, who was also among the founders of Arbel, noted that the residents were merely the vanguard, that the senior doctors also wanted to be part of negotiations. It seems one had to resign in order to be granted that privilege, he observed wryly (Globes, 27 October 2011). Some 100 senior doctors including department directors from hospitals around the country carried out the threat and submitted their resignation. One hospital threatened to immediately dismiss 10 of the 31 doctors there who submitted their resignation (which would otherwise go into effect in a month’s time). In response, doctors at the hospital shut down its operations for a few hours one morning and threatened further strikes, rejecting attempts by the Health Ministry director to persuade them to withdraw their resignation.
Thus the IMA’s success in achieving a good collective agreement seems to be accompanied by the fragmentation of labour representation, the erosion of collective labour relations in the health sector and the challenge to the union’s legitimacy in representing, as a broad population of workers united by ideals of solidarity, the infamously heterogeneous groups that make up the health services (see Ishay, 1986; Modan, 1985). Moreover, the creation of an alternative bargaining framework (the residents’) set a precedent for particularist demands and indeed, other groups are already seeking separate representational frameworks.
Of the various formal and informal groups that emerged to challenge the IMA or speak for a specific group within the health sector, in addition to Arbel, one group was particularly prominent: Mirsham. According to its chair, Yona Weissbuch (interview), this organization began in the early 2000s as informal meetings among medical residents who wished to better understand the system and the reasons for the problems they were encountering, including inadequate representation in the IMA. Mirsham, as an NGO, has no status within the IMA, and now includes students (who cannot join the IMA since they are not yet doctors) and interns among its members. Mirsham was active behind the scenes in much of the residents’ activities throughout the campaign, but its leaders preferred to keep the organization out of the headlines as it has no formal status (Weissbuch, interview).
In 2012, an organization called Asli was established to represent interns who are not full members of the IMA but whose professional lives are of course affected by IMA decisions. They too are now struggling for separate representational status.
The social workers’ struggle, 2011
The social workers’ struggle was in some ways similar to the doctors’, but had a very different underlying logic. 3 Most prominently, a range of new organizations sprung up among the social workers, as seen also among the doctors. However, where some of the doctors’ organizations, including Mirsham and Asli, pushed for representation independent of the main union (the IMA), the social workers’ organizations aimed to strengthen their union, the Social Workers’ Union (SWU). Second, a paramount objective of the social workers’ strike was to put an end to the privatization of the profession – an objective notably absent from the doctors’ campaign.
Until 2011, the social workers had been covered by a collective agreement from 1994, which was generally considered to be a good agreement. But since then, wages had eroded and union density had decreased because an increasing number of social workers are employed in the private sector (those in the public sector are automatically in the union; those in the private sector have to make the conscious decision to join and even then their efforts at organizing in the workplace are often suppressed by employers). The aim of the campaign was thus not just to improve employment terms for union members, but to stop privatization, halt the retrenchment of welfare services, and bring those in the private sector ‘back into’ the union.
The first stirrings of the campaign can be seen in the 2007 petition calling for action against privatization and for strengthening the union’s role in shaping social policy. In the same year, an action group called ‘The Centre for the Rights of those Harmed by the Privatization of Social Services’ was established. In 2009, a unit known as Amuta was set up within the SWU to concentrate specifically on outreach in the private sector. As the campaign gathered pace in 2011, the issue of privatization was emphasized by most activists and by the new organizations that emerged. Among the most prominent of these was Osim Shinui, a student organization aiming to ‘wake up’ social work students to the precariousness of their professional future; and Atidenu, which concentrated on the private sector and on recruiting members to the union.
Common to all the new organizations was a desire to participate, to influence their union, their profession and wider social policy. Demands for greater democracy within the union had been heard for a number of years. In response, in 2007, the SWU had made some amendments to its constitution to increase workplace representation and integrate professional cells, representing sectors within the social work field, in its higher institutions (Shlosberg, 2012). Now the social worker activists created these organizations to ‘wake up’ and ‘involve’ social workers in the process of representation and collective bargaining.
However, the organizations remained part of union. Though some, particularly Osim Shinui, took advantage of their semi-autonomous status to do things the union would not permit itself to do (act the ‘wild child’), none wanted to leave the union (though the option was briefly raised, particularly by a small group calling itself Osot Hasharon) – all saw a need to work within union channels and support the union and the main labour federation, the Histadrut, of which the union was part. 4 People associated with Atidenu even ran in the union elections of 2009, though not officially as Atidenu but as independent candidates; and Osim Shinui fought for students’ right to participate as observers in the union’s institutions.
Despite this support for their union and the perception that their strength depended on the ‘old’ union channels, the agreement finally reached disappointed the majority of social workers. The agreement failed to address the main concerns of the social workers – above all, the issue of privatization and influence on social policy. Activists were certain that a better agreement could have been reached with more support from the union; anger, then, was directed particularly at the union which, it was thought, had let them down, and had failed to act in their interests or according to their perceptions of what the struggle was about. It had neutralized workers’ voice and failed to understand the significance of the desire to participate, and failed to take advantage of it. The union was also subject to the authoritarian leadership of the Histadrut which, till recently, has made little effort to encourage worker participation and prefers top-level agreements and a partnership approach to industrial relations (see Heery, 2002; Turner, 2005). The union is not autonomous; it is subject to the Histadrut’s authority and decisions, and dependent on the Histadrut for funding and organization. In this case, it found itself stuck between the Histadrut’s approach and the social workers’ desire to be involved, to influence.
Discussion
Comparing the campaigns
The doctors’ struggle and the social workers’ struggle had some prominent characteristics in common. Both the doctors and the social workers were acting within well-established unions with a strong past as professional organizations. The doctors’ union, the IMA, has roots in various organizations set up in the 1920s and 1930s before the state was established (1948), and in the following years consolidated its position as the main representative of the doctors as the numbers of independently operating private practitioners declined (Bin Nun et al., 2005). It was central to the development of the health services in the pre-state Jewish community and after 1948, when they were dominated by state-owned hospitals and the Clalit HMO, owned by the labour federation (the Histadrut); the structure of the union reflects this, with two main internal organizations – the Clalit doctors and the state hospital doctors.
The SWU also has roots in various organizations set up before the state was established when the provision of social services was seen as essential to the success of the Zionist project (Rosenhek, 2002b). These organizations were united under the Social Welfare Ministry in 1948 and formalized in the National Insurance Act of 1953 and the Social Welfare Services Act of 1958 (Loewenberg, 1998). The union itself was formally established in 1937 as a unit within the labour federation, the Histadrut. Until the 1980s, it was involved in shaping government social policies and represented the vast majority of social workers. Thus both organizations have been central unions in the public sector representing a large worker population which provides services perceived as essential to the wellbeing of the state’s citizens.
In the campaigns under discussion, notably, there was a sweeping desire among union members to make their voice heard and be involved in the campaign. This was born of long-standing frustration with the representative organization which in both cases, it was felt, did not fairly represent its members or offer them sufficient opportunities to influence the organization’s activities. Activists in both cases responded to what they felt were the unions’ (historical) structural barriers to fairer representation as well as more immediate barriers based on leadership styles, and both cases saw the establishment of various new organizations that reflected this frustration with the union and desire to be involved.
However, while various groups of doctors sought new representative frameworks, the social workers chose to remain within the union and emphasized this choice, explaining the logic in both practical and ideological (solidarity) terms. The chair of Atidenu at the time of the strike, Inbal Shlosberg, said, ‘I want people to be members of the union, that’s my ideal, that’s where strength comes from’ (interview). Osim Shinui’s chair, Tal Goldman, expressed her support for the Histadrut (of which the SWU is part), noting, ‘Ideologically, if we go back 40 years, the Histadrut reflects my values.’ The various groups among the doctors, notably (due to their success in creating an alternative collective framework) the medical residents, encouraged the fragmentation of representation, openly challenging the IMA’s ability to hold together this infamously heterogeneous sector; the state and its institutions and representatives, for their part, did their best to counter this, emphasizing the sanctity of the collective agreement and the importance of the IMA as the sole legitimate representative of the doctors. The social workers, on the other hand, sought to halt the fragmentation of representation and unify all social workers under the SWU, countering state policies in the social services sector which (whether by intention or design) had left many social workers without representation at all.
Moreover, the tangible result of collective bargaining for the doctors was a reasonable agreement which included a 47% wage increase over nine years, 70% of which to paid out over the first three years; a further 1000 additional posts for doctors; a limit of six long (overnight) shifts per month; the redistribution of resources in favour of outlying areas and medical specialties suffering shortages of staff; and additional overtime pay (plus other hourly rate benefits) for residents (which significantly raised their wages, particularly those of residents in outlying areas). In addition, the campaign led to the establishment of an alternative collective framework which the residents succeeded in arranging for themselves, which led to further benefits for them. The social workers, on the other hand, received wage increases of some 25% on average (those at the lower end of the wage scale received more) plus one-off lump sums. However, much of the increase would have been paid regardless of the strike, in the framework of a public sector agreement signed a few months previously by the Histadrut, while the lump sum partly compensates for delayed wage increases from 2009–2010. A minimum wage was achieved for those working in the private sector but it has no teeth since no mechanisms for enforcing it are in place. Thus the social workers were compelled to accept an agreement which sidestepped all the main issues the campaign had raised, and which barely improved their employment terms. As Goldman put it,
They talked about wages, including wages in the private sector, and enforcement, but they didn’t touch the heart of the matter, the lack of employment horizon, or lack of posts, or an extension order [for the private sector]. . . . The agreement feels like a plaster . . . it deals with side issues, not the root problems. (Goldman, interview)
Finally, where the social workers emphasized the importance of the services they provide for the less privileged populations, and the connection between these services and their employment, the doctors’ campaign was conducted along very different lines. This is not to say that doctors are less idealistic or altruistic, but the atmosphere of the campaign was markedly different. As a former IMA chairperson put it,
The problem is that you look around, the grass is greener. … You see your lawyer friends making more [money]. … Then hi-tech calls, says ‘you have an MD, come help us in biomedics’. Who wants to be a doctor? Let’s make money. … There’s no professional pride. (Dolev, interview)
He noted that ‘reality has changed’, that young doctors are no longer willing to apply themselves with the same selfless dedication: ‘Where we said “us, ours”, they say “me, mine”; it’s a completely different world.’ Similar sentiments were expressed by the Mirsham chairperson and journalists covering the campaign (Linder-Ganz, interview; Weissbuch, interview).
The doctors, then, are perceived and perceive themselves as ‘elite’, with friends in high places and good relations with the media. These links were reflected in the residents’ and senior doctors’ use of leading media consultants, PR firms and strategic consultants; they can also be seen in the extensive media coverage, which was mostly very supportive of the residents’ efforts (with the exception of the freebie, Israel Hayom), and was quick to present the IMA chairperson as overbearing and out of touch with the groups he was supposed to be representing (Linder-Ganz, interview). According to a survey carried out for TheMarker (9 December 2011), between 20 August and 8 December, the campaign was mentioned more times in the Israeli media than the Iran nuclear programme, which was widely perceived at the time to be a threat to Israel’s very survival.
The senior doctors’ opposition to clocking in, another contested aspect of the agreement signed by the IMA, also reflects the doctors’ privileged status and freedom of action, which they feared to lose if they had to account for their time like factory labourers.
Given the similarities of the field, their position in the public service sector and the timing of the campaigns, why were the results of the collective bargaining so different? Why did the social workers cling to the SWU while the doctors had more confidence in their abilities to form groups separate from the IMA? Why were state institutions so keen to maintain the integrity of the IMA and feared the strength of breakaway groups? Why were there such differing emphases during the campaigns, such different atmospheres, different perceptions of what is wrong in the public services? The answer, I assert, lies in the different way neoliberalism and privatization have affected different sectors of the public services.
Differing modes of privatization
The campaigns must be considered in the context of some 30 years of economic liberalization and deregulation in Israel (Katz and Zahori, in Korn, 2002; Ram and Berkowitz, 2006; Shafir and Peled, 2000), which included efforts to undermine organized labour (Maor, in Mishori and Maor, 2012). Public sector unions are the last bastions of a once highly unionized economy (Haberfeld, 1995); thus many of the organizing initiatives which began in the latter half of the first decade of the millennium, such as the campaigns in education and universities, transportation and telecommunications, included an awareness that more was at stake than merely employment terms: the place of organized labour in industrial relations was being fought for, and processes of privatization and outsourcing were often perceived as assaults on organized labour and opposed accordingly. The health and the social service sectors too have seen sweeping changes to their field as economic liberalization has affected employment terms and service provision.
For many years, the health system has seen increasing outsourcing of various services and the intentional promotion of competition (Bin Nun et al., 2005: 201). However, the main changes to the sector can be traced to the National Health Insurance Law 1994, which, among other things, set up the regulatory framework for the current privatization drive. It must be noted that this law nationalized the health services: one of its main aims was to separate Clalit from the Histadrut and Clalit’s main rival, Meuchedet, from the Histadrut’s rival union, the National Histadrut. 5 The law, then, took away one of the labour federations’ main assets and effectively accelerated the transformation of the health sector from what Eric Olin Wright (1997: 462) calls the ‘state service sector’ (comprised of decommodified services; in this case, services whose provision was entrusted to the labour federations 6 ) to the ‘state political sector’ comprised of institutions within which the function of reproducing capitalist social relations is particularly important.
In a study of the health sector, Dani Filc (2005) has explained the central role of health care business in the neoliberal/post-Fordist economy and centrality of health within neoliberal governmentality. As Filc notes, the sector is an enormous industry with highly profitable satellite industries such as pharmaceuticals and biotechnologies. As more and more spheres of everyday life are ‘medicalized’ (the ‘tendency to explain socio-political phenomena as medical pathologies’; 2005: 181) health care increasingly becomes a potential field for huge capital accumulation (2005: 190). From 1979 to 1999, Israel’s health industry experienced huge growth relative to the economy as a whole, and relative to other industries, in terms of the number of firms operating, the number of employees, volume of sales and volume of goods for export (2005: 185–186). For investors, the sector offers guaranteed spending, since states will ensure their citizens a basic level of health, and citizens will pay for what they can beyond state assistance. On the other hand, according to neoliberal principles, states must reduce public spending, thus health services undergo creeping privatization, opening the way for further profit-making opportunities, and indeed, as Filc notes, Israel has seen the increasing privatization of financing and ownership of health services; even non-profit institutions (the four HMOs and public hospitals) have adopted the neoliberal model, offering a range of services for pay (2005: 184).
Relations between the Health Ministry and the Finance Ministry reflect the growing importance of the health sector as the object of neoliberal reforms. The Health Ministry has long been squeezed between the demands of the state and the needs of the health system as perceived by the people working within it, and as the power of the Finance Ministry has increased, individual ministries’ independence has declined. 7 At the same time, the position of health minister has become more important, as reflected by the trend to grant this position to major government coalition partners instead of fobbing it off to insignificant parties, as in the past (see Rosen and Samuel, 2009: 17). This may be why, at the time of the strike, the Prime Minister retained the health ministry portfolio for himself.
For those working in the field, privatization is manifested in various ways. First, supplementary health insurance, offered by the HMOs, grants various benefits and discounts for services and medication beyond the ‘health basket’ of basic essential services provided for all by law. The Health Ministry transfers funds to the four HMOs (of which Clalit is by far the largest, with over 50% of the population) to cover the services they are legally obliged to provide. However, the two main HMOs have been plagued by debts for most of their history, shored up by occasional government ‘rehabilitation’ plans and bailouts (Bin Nun et al., 2005); the supplementary insurance plans provide an additional source of revenue for all HMOs (in 2003, over 70% of the public had some kind of additional insurance).
Second, patient contributions for consultations with specialists (including the option of a second opinion) and part payment for medication and services are increasing. State hospitals are funded by the Health Ministry from the state budget, brought before the Knesset for approval every two years. In 2002, the public health sector (including HMOs, Health Ministry services, local authorities and state-supported NPOs supplying health services) accounted for 72% of the national health expenditure. Yet public sources of funding are decreasing, from some 75% in the 1980s to 68% in 2002. The slack is taken up by private sources, mainly part-payment for services within the ‘health basket’; household payments for Health Ministry services, mostly participation in hospitalization costs; and services outside the ‘basket’ including medication, private doctors, private surgery, lab tests, alternative medicine, private nurses and ambulances, psychological and psychiatric visits, and institutional long-term care (Rosen and Samuel, 2009).
Third, services are increasingly outsourced to private companies or private clinics. The growing industry of ‘medical tourism’ should be added to this list as well. Thus while the state ensures a (still relatively good) basic level of health services for all, those that can pay more are increasingly able to enjoy better and faster services. 8
A prominent characteristic of this privatization is the blurring of boundaries between the private and the public (state-funded) services. For example, in 1997, the state hospitals set up ‘health trusts’, involving changes to management and authority structure. These organizations were established within the hospitals as separate legal entities to provide services, and their relationship with the host hospital is regulated by agreement with the state. As separate entities, they are able to employ physicians after hours; their main sources of revenue is the sale of surgical and outpatient clinic services to the HMOs during late afternoon, evening and night. Payment is determined by contacts between the trust and individual physicians (Bin Nun et al., 2005; Rosen and Samuel, 2009: 52).
Doctors are in a good position to benefit from the changes to their field. As a highly skilled workforce often handling extremely expensive and specialized equipment, they are the main conduit for medication and services to patients, able to direct patients to certain treatments or promote certain drugs, and ensure the smooth operation of medical tourism. The testing and application of medical equipment also requires their cooperation. All this puts them in a strong position of authority and domination in the health system and vis-a-vis the employer (the state) which is seeking to attract companies (investors, corporate clients). As service providers with individual contracts for additional hours, they are also in a key position to benefit from the state’s promotion of competition and choice. Many doctors in the public sector also have private clinics (which is another reason why they were adamantly opposed to clocking in during the strike), which means they are the main beneficiaries of the state’s encouragement of the use of private practices.
Reflecting their potential to benefit from the creeping privatization of many medical services, most doctors are in favour of ‘Sharap’ (Hebrew acronym for ‘private medical services’), the provision of private services using public premises and equipment after regular hours which offers doctors an extra source of income (the hospital receives a percentage of the fee collected by the doctor). Sharap is currently offered only in two hospitals, but the state is under continuous pressure to permit the service to be offered in other hospitals. Hospital department heads and hospital directors tend to be in favour, because it enables doctors to earn more and generates revenue for the institution without requiring an additional budget from the state. The IMA was also in favour (Bin Nun et al., 2005), though it has tended to keep quiet about this for fear of losing public support. 9 The Finance Ministry is mostly against Sharap, for fear it would lead to increased wage demands in the public sector. The Ministry’s opposition further illustrates the play-off between privatization and cuts to public expenditure, reflected in the different modes of privatization sought by the state. 10
Thus, as Rosen and Samuel (2009: 66) note, the high status of physicians and their control over life-saving services, together with a high union density, has made the IMA very powerful. Now this strength has been augmented with the increasing importance of the field in the neoliberal capital accumulation regime. Privatization, then, empowers the doctors. In contrast, the same neoliberal processes have had a very different effect on social workers. The importance of social work, and hence the power and social status of social workers, was dependent on an ‘ideology’ of general equality and welfare. Now this ideal has been abandoned as too expensive and replaced by a mode of thinking that repackages social problems as individual failures: As Cobble and Vosko put it, ‘We are entering the world of Me, Inc. … a strange new world in which everyone can define themselves as “independent economic entities” and sell themselves as products on the market’, because the expansion of the definition of ‘capitalist’ now includes all of us as entrepreneurs (in Carré et al., 2000: 308; see also Helman, 2013; Peters, 2001). This shift undermines both the professional field of social work and the status and worth of the populations which social workers tend to assist.
Like the health sector, social work has undergone a process of privatization, but the forms and results of this process are in stark contrast to those in the health sector. Social work as a profession has mostly suffered from the deregulation and privatization which have undermined support for the welfare state and its associated services (Filc, in Filc and Ram, 2004; Shalev, in Ram and Berkowitz, 2006). Budgets for service provision have been progressively cut and means testing introduced (Ajzenstadt and Rosenhek, 2002; Rosenhek, 2002a). As governments have shaken off responsibility for services, service provision has been outsourced to private companies and not-for-profit organizations (Doron, in Loewenberg, 1998; Gidron et al., 2004), which has undermined the status of the profession and impacted on the remuneration of the social workers (see Spiro et al., in Loewenberg, 1998, who suggest the former is due to the latter as salaries become more important in raising prestige). Some 40% of social workers are now employed in the private sector, where low wages, few peripheral benefits, poor opportunities for ongoing training and high turnover are the norm. Today, some 75% of those graduating social work studies can expect to be employed in the private sector (Farber, Goldman, interviews).
Where privatization in the health sector means investment and development, privatization in the social services means budget-cutting and outsourcing. As Bernstein (1986: 398–399) notes, the main source of profit in subcontracting is short term and wage-based, involving the intensification of the labour process since there is no need to invest in a worker’s future and hence no need for pension schemes, sick leave or other benefits that contribute to long-term worker welfare. Thus, she says, ‘the aspects inherent in capitalist relations, the extraction of labour for the maximization of profits in return for the reproduction of labour power, will be interpreted in the most immediate and narrow sense’ (Bernstein, 1986: 399). Social services, then, are subcontracted to firms whose main source of profit is the reduction of wages, or to organizations struggling with low budgets to fill service provision gaps created by the retreat of the state.
Where many health sector clients are a potential source of revenue and return on investment, the same cannot be said for most of the ‘clients’ of social services. The ‘medicalization’ of more and more spheres of everyday life which benefits the health sector (Filc, 2005: 181), part of the same tendency to emphasize the individual over the social, further undermines the profession of social work, based as it is on a worldview of collective responsibility. Moreover, the social services do not engender any potentially profitable satellite industries, nor is the social service market potentially international in the way the health service market is. While the health sector has successfully commodified its services, the social workers are forced to emphasize the public service ethos inherent in their work – their labour produces use-values only, externalities which benefit society generally rather than individually; thus it is hard to put a monetary value to them on the basis of market mechanisms (see Gill-McLure, 2007: 43–48).
As Harvey (2005) notes, attacks on organized labour are part of the neoliberal agenda, and indeed, Israeli governments have done their best to break organized labour as part of their privatization reforms in other sectors, and by undermining the Histadrut (see Maor, in Mishori and Maor, 2012). On this issue too the doctors’ campaign illustrates the importance of understanding how neoliberalism is applied in practice. Indeed, the case appears to show the fragmentation of representation as the IMA was challenged by various groups seeking ‘fairer’ representation, yet state representatives and the courts made every effort to hold the IMA together as the sole representative of the doctors. Burgess and Symon (2012: 733) point out that peak employer associations want to limit ‘lateral disorganisation’ (fragmentation of representation) which threatens stability and the predictability of existing arrangements, and undermines ‘negotiated restraint’ (see also Wright, 2000). Employees enjoying high structural power (i.e. are in demand as individuals due to skills not easily replaced; see Dörre, 2011, after Wright, 1994) such as the doctors can readily threaten a sector whose profitability is dependent on stability. Indeed, even the introduction of competition to the health sector was carried out in a limited and controlled manner to ensure stability in the face of possible ‘market failures’ (see Bin Nun et al., 2005). Thus the state’s attempts to retain the ‘old’ collective bargaining framework should be seen as reflecting its fear of new, strong, worker groups being created in a field which absorbs a huge portion of the state budget and also represents a potentially highly lucrative arena for privatization. In the social work sector, the possibility of instability due to union failure to restrain workers posed no threat to profit but only to a ‘collective good’; similarly, the fragmentation of representation would have offered no benefits to social workers, as they well understood.
The campaigns in the two branches, social work and health, also suggest the contradictory effects of privatization regarding the private and public sectors; indeed, even the distinction between the sectors is increasingly complex. The social workers are divided between the two and their union unable to bridge the gap, resulting in dwindling membership rates; in fact, their campaign showed that ‘the social workers’ may no longer exist as a definable group in IR terms – their campaign aimed to erase the division between the private and public sectors, but failed. The doctors, on the other hand, operate in both sectors and the dividing line is increasingly blurred. Neoliberalization is causing both of these apparently contradictory outcomes as it ‘colonizes’ the service sector: the neoliberal accumulation regime insists on the privatization of both branches, but in one branch (social work) this has led to an increasing number of workers in precarious employment, outside collective frameworks, while in the other (health) it has opened up opportunities for groups within the union to assert their own interests.
In their analysis of sectional union activity challenging incumbent unions in various sectors, Burgess and Symon (2012) argue that trade unions are confronted by strategic dilemmas between maintaining unity and independent organizing (particularly in organized forms of capitalism, or Coordinated Market Economies, according to Varieties of Capitalism literature; Hall and Soskice, 2001). However, I suggest that here the ‘rebellious’ doctors (principally the residents) were not responding to a crisis of representation that required breakaway groups as a strategic response to pressure on the union. Rather, they saw an opportunity to better their own position, having recognized their own strength in a profitable field dependent on their skills. Unlike in other public sectors, privatization for them has not meant job loss: the doctors’ highly visible place in the ‘negotiated order’ (Strauss, 1978) was assured, and was not threatened by the changes in the sphere of labour relations – on the contrary, those changes augmented their power, which contributed to the success of their campaign, both within the IMA framework and within the ‘breakaway’ framework demanded by the residents. The fragmentation of the IMA, then, was not a sign of weakness as often noted in much revitalization literature, but a sign of strength, while the attempts to unify the social workers within their union reflected the fact that in their case representation had already been fragmented, manifested in the non-unionized private-sector social workers. In other words, the doctors’ campaign is not a case of the state’s ‘failure’ to ‘neoliberalize’ labour relations – the doctors’ success in facing their employers and the residents’ success in compelling the state to accept an alternative framework is itself a side effect of neoliberal processes, which both strengthened the doctors and enabled the challenges to the IMA from a position of strength.
The particularity of each case must be emphasized: we cannot surmise that doctors will be strong in all national health sectors undergoing privatization on the basis of the strength of the Israeli doctors. For example, according to Chapman (2006), young German doctors in training are no longer willing to allow themselves to be ‘exploited’, just as Israeli medical residents are not; in Germany too, patients are paying more out of their own pocket; and, like in Israel, there is a lack of doctors in outlying areas, and doctors are leaving the profession to join connected industries such as pharmaceuticals. Nonetheless, according to Nowak (2006), German doctors (as employees) are now weaker, with lower incomes, increasing workloads and a reduced decision-making latitude due to loss of professional independence in clinical work and increasing workload of bureaucratic tasks. In Israel, on the contrary, the mode of privatization – specifically the way private services or private options are enmeshed within the public service framework – has augmented the doctors’ strength by placing them in a key position for the success of privatization policies. Thus it is particular modes of privatization in their interaction with regulatory frameworks and (historical) forms of labour relations that affect the strength of labour, and organized labour, in any given sector.
Conclusion
The campaigns of the Israeli social workers and doctors in 2011 had key characteristics in common but were dissimilar in many respects, including the results of the collective bargaining. This offers an excellent opportunity to investigate the structural aspects of labour power in a neoliberal setting and how neoliberal changes, in particular the privatization of public services, affects industrial relations, including the aims and outcomes of worker struggles.
I suggested the differences between the campaigns are linked to the different ways privatization is manifested in different sectors, which in turn is affected by the importance of each sector to the neoliberal capital accumulation regime. Some sectors like the health sector can be transformed to become profitable industries, attracting investment, connected to global markets and nurturing satellite industries. Skilled workers in sectors like this are likely to find their strength augmented, and the state will attempt to ensure stable industrial relations by maintaining a centralized collective bargaining structure dominated by a union able to restrain grassroots activism; a strong union works in the state’s favour.
Other sectors such as social work are being undermined by neoliberalism since they are unattractive to investors and the ‘spirit’ of neoliberalism – individualism, self-reliance, self-marketing and competition – undermines the logics and ideals on which they were developed. Skilled professionals in such sectors work mainly with people who are not (for the most part) potential sources of profit as clients. Their skills are not an essential part of the capital accumulation structure; on the contrary, their skills are mostly applied in ways which demand state budgetary support and offer scant opportunities for revenue. Private companies operating in the social work sector can ensure profits only by reducing wages to a minimum. The state has no interest in maintaining the unity of worker representation in this sector, and industrial action by social workers affects those least able to apply pressure on state institutions and representatives; this is why the social workers made such effort to ‘explain’ their campaign to the general public.
The social workers clung to their union but were frustrated by its inaction over what they perceived as the core aim: halting privatization. In the doctors’ case, on the other hand, opposition to the union and demands for greater representation were not connected to opposition to the Finance Ministry policies or to processes broadly definable as neoliberal. There was no recognition of an inherent clash of interests between worker (doctors) and employer (the state and the Clalit HMO) – in Polanyi’s (1957) terms, we could say that while the social workers’ campaign can be seen as part of a ‘double movement’ reaction against neoliberalization, the doctors’ campaign was not opposed to neoliberalization – after all, the doctors stand to gain personally from the neoliberal changes to their field. The doctors positioned themselves as part of the elite, differentiated from other workers, while the social workers identified themselves with those on the margins of society and with the social protest movement which was gathering steam at that time. Theirs was clearly an oppositional stance, critical of broadly neoliberal policies such as privatization and the reduction of the welfare services budget. 11
To conclude: these two cases suggest we must investigate how privatization is implemented on the ground, paying particular attention to differences between (public service) sectors within the same country. Implementation is specific to a country’s historical situation, regulatory frameworks, industrial relations norms and the development of the sector in question, as well as links to other important sectors, such as (in Israel’s case) the hi-tech industry (Filc, 2005). While neoliberalism may indeed undermine organized labour in general, it is uneven in its effects, benefiting some groups of workers and undermining others. By closely studying the interaction between specific sectors and neoliberal policies, we can avoid sweeping statements about the detrimental effects of privatization on labour, and achieve a better understanding of what Goldstein (2012) calls ‘actually existing neoliberalism’.
Footnotes
Acknowledgements
I would like to thank Professor Uri Ram for his valuable comments on earlier drafts, and the two anonymous reviewers for their insights and suggestions which led to a much clearer and stronger manuscript.
Funding
This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.