Israeli federation of labor.
The Histadrut - full name in Hebrew, ha-Histadrut ha-Kelalit shel ha-Oevdim ha-Ivriʾim be-EretzYisrael (The General Organization of the Jewish Workers in Eretz-Yisrael) - was founded in 1920, with a membership of 5,000. In 1930 it had 28,000 members; in 1940, 112,000; in 1950, 352,000; in 1960, 689,000; in 1970, 1,038,000; and in 1980, 1,417,000. By 1992 it had approximately 1.6 million members.
The Histadrut, which has often been called a state within the state, acts as an umbrella organization for trade unions. It has also played an important role in the development of agriculture, wholesale and retail marketing of food and other products, rural settlement, industry, construction and housing, industry, banking, insurance, transportation, water, health, and social services.
Following the creation of the State of Israel in 1948, the Histadrut handed some of its educational functions as well as its employment exchanges to the government. In recent years, it has sold a number of commercial concerns to the private sector.
In the 1920s, under the British mandate, the Histadrut's role was to help develop the Jewish economy in Palestine. To this end, in 1921 it set up Bank Hapoalim (The Workers' Bank), and in 1923, Hevrat Ovdim (The Workers' Company or Cooperative Federation) was founded. This was to become a holding company for most of the Histadrut's wide range of economic enterprises.
By 1927, when the Solel Boneh construction and industrial group first went bankrupt, the importance of reinvesting profits and maintaining an independent capital base was understood. From the late 1920s onward, economic enterprises were directed toward capital accumulation so as to avoid reliance on outside sources of finance. Solel Boneh, as well as being the largest construction company in the pre-independence period, had investments in industry. Its subsidiary, Koor, owned the Phoenicia glass works, the Vulcan foundry, and other industrial companies. The policy of financial independence was successful until the 1980s, when a number of Histadrut bodies got into serious financial difficulties.
By 1930 the retail cooperative, Hamashbir; the insurance company, Hasneh; and other groups were incorporated into Hevrat Ovdim. The Histadrut had become both a large employer as well as a trade union body. The basic structure has remained unchanged since the 1920s, but attitudes toward profits and dismissing workers have become more pragmatic and less socialist since the late 1980s.
Although about three-quarters of all wage earners in Israel are members of the Histadrut, this includes many who do no more than pay dues to its health fund, Kupat Holim Kelalit, the largest fund in the country. A share of the membership fee is passed on to the Histadrut by the health fund. Members of kibbutzim and other cooperatives are also automatically enrolled, as are those working in Histadrut enterprises. Although far fewer are, therefore, voluntary members, about 85 percent of the labor force is covered by collective labor agreements negotiated by the Histadrut. About forty trade unions, representing a wide range of blue- and white-collar workers in the public and private sectors, are affiliated. While the Histadrut is highly centralized, professional workers' unions have a high degree of autonomy.
Elections are held every four years on a political party base, and the Labor Party and its allies have had a majority since the Histadrut's foundation. Each party, in proportion to its share of the votes cast, nominates delegates to a forum that elects the central committee. The latter consists of members of the ruling coalition alone. Workers' committees at plant level are elected annually or biannually.
The Histadrut and its affiliated organizations (such as the kibbutzim) in 1991 were responsible for about 16 percent of industrial output, and 14 percent of industrial investment in Israel. Exports of these industries came to US$1.4 billion.
In that year, it was also responsible for 80 percent of agricultural output and exports, about 38 percent of the assets of the banking system (through Bank Hapoalim), 9 percent of insurance companies' assets (through Hasneh), the construction of 8 percent of homes being built, as well as large shares of retailing and wholesaling through its producer cooperatives and marketing organizations. It operated most of the country's buses through two large cooperatives and, both directly and through the kibbutzim, had a range of hotels and guest houses. About 70 percent of the population were members of Kupat Holim Kelalit, which provides medical insurance and services through clinics and hospitals. The Histadrut owns the Davar daily newspaper and a publishing company and has interests in the shipping and airline industries. Finally through Bank Hapoalim, it has large shareholdings in joint ventures with private sector industry.
During the 1980s, many of the Histadrut's companies and affiliates ran into serious financial difficulties. These included Koor, the kibbutzim, Kupat Holim Kelalit, and Bank Hapoalim. In all these cases, the government provided financial assistance and forced management changes. It remains to be seen if the Histadrut can regain control of these groups by buying shares back from the government or by other means.
The Histadrut's position in Israel has weakened both politically and economically. It has been weakened by grassroots alienation, by the dominance of right-wing parties in the Knesset between 1977 and 1992, and by its own lack of a clear socioeconomic message. It has faced serious financial difficulties in many of its economic enterprises and has had to be bailed out by Likud and Labor governments. The Labor Party has distanced itself from the bureaucracy of the Histadrut, which it considers an electoral hindrance. This would have been inconceivable in the first half of the twentieth century.
Bibliography
Broido, Ephraim. "Jewish Palestine: The Social Fabric." In Palestine's Economic Future, edited by Joseph Burton Hobman. London: P.L. Humphries, 1946.
Preuss, Walter. The Labour Movement in Israel: Past and Present, 3d edition. Jerusalem: R. Mass, 1965.
Rivlin, Paul. The Israeli Economy. Boulder, CO: Westview, 1992.
Shalev, Michael. Labour and the Political Economy in Israel. New York: Oxford University Press, 1992.
Sternhell, Zeev. The Founding Myths of Israel: Nationalism, Socialism, and the Making of the Jewish State. Princeton, NJ: Princeton University Press, 1998.
— PAUL RIVLIN
