|
Last update - 01:36 18/07/2005
Builders: We will be forced to up apartment prices
By Anat Georgi
The atmosphere at building sites in recent weeks has been relatively quiet. The Immigration Police inspectors, who used to visit regularly, seeking illegal workers and sowing fear among employees and employers alike, have almost completely disappeared. Still, beneath the surface, tempers are seething. Contractors and building company executives claim that the reforms regarding the employment of foreign workers, implemented a month ago, drastically increase their costs and will force them to raise apartment prices.
In December 2004, the Association of Contractors and Builders in Israel (ACBI), the Finance Ministry and the Industry, Trade and Employment Ministry signed an agreement to reform the employment of foreign workers in the construction industry. The reforms were designed to stop foreign workers from being tied to their employers, increase competition over workers and thereby precipitate an increase in wages and encourage the employment of Israelis in this industry.
On June 15, 2005 the reforms went into effect. Now, contractors can employ foreign workers only through manpower agencies. Each agency has to set up a "severance pay" account for each worker, which he is to receive upon departing from Israel. Contractors can now employ as many workers as they want, and the arrangement grants employers flexibility in dismissing the hires.
The contractors claim, however, that the reforms have made it financially unfeasible to employ foreign workers, have removed less professional workers from the work market and, despite expectations, have not encouraged Israelis to enter this industry.
"The agreement that was signed removes unskilled workers, particularly the Chinese, from the ranks of the employed," says Itamar Deutscher, CEO of Danya Cebus. "In the past we had two wage levels, and there were skilled workers and regular workers. The reforms have made each hour of work more expensive, and we cannot employ unskilled workers."
The contractors further claim that the cost of employing a foreign worker has risen from $7 per hour to $9-$10 per hour in the past few months - an increase of 35 percent. The contractors are threatening not to absorb these high costs in the long term, and say that sooner or later they will have to raise apartment prices.
Fear of the Immigration Police
"The agreement greatly increased the cost of [employing] foreign workers, because we now have to cover the millions in deposits and advance payments for permits for each worker," explains Avi Arenson, owner and CEO of the A. Arenson construction company, who says that an hour of labor now costs $9.50-$10, compared to $4 two years ago and $7 last year. Haim Feiglin, CEO of ZMH Hammerman, concurs that the most prominent initial effect of the reforms is the jump in the cost of labor.
"The contractors pay for the airfare and government fees under all sorts of names," says Arenson, who notes that this has increased the incentive not to pay and not to employ legal foreign workers. "Like many of my colleagues, however, I am afraid of the Immigration Police, who regularly check construction sites and the legal status of the workers there, and I do everything not to fall into their hands. They behave roughly."
As for Israeli workers, Arenson says that the high price of foreign workers has not made Israeli workers any more attractive.
"The Israelis adjust themselves to this high price, and their production level is low," laments Arenson. "As for Israeli Arab workers, there are technical problems that make it difficult to employ them: Since they are Muslim, they don't work on Fridays. They are also family men who want to be home in the evenings. This means that if an Israeli Arab laborer works in the center of the country and lives in the far north, he has to leave early. To their credit, however, I must say that they organize themselves into work teams and are skilled workers."
Deutscher adds that the Israeli Arab workers have entered the vacuum created by the departure of many of the foreign workers. The Arabs are readily available, but are not necessarily cheaper.
The contractors relate that the manpower agencies can be divided into two categories: independent companies that provide services to contractors, and manpower companies set up by the contractors themselves.
"In principle," says Arenson, "anyone can set up a manpower company as long as he meets the requirements, such as appointing an experienced manager, and having substantial equity and a clean slate with the authorities."
The high cost of each worker is prompting the manpower companies to examine each person closely. It is easy for a company to fill its rosters with workers, but if a contractor receives an unskilled worker who proves unsuitable, the contractor will return him and the money the company invested in him will go down the drain. This is why it is better for contractors to set up their own manpower companies.
The Minrav Group, for example, set up a manpower company, Team Oz, as a subsidiary. This company has so far absorbed some 140 workers, all of whom have been properly registered and came from companies within the group. Now Team Oz is looking for more groups of skilled workers who meet its criteria, such as a lengthy period in Israel, so that references are available to attest to their skills.
Even though Team Oz is owned by Minrav, the cost of employing foreign workers is still about $10 per hour, compared to $7.50 before the reforms. Eran Kuznitsky, head of the residential division at Minrav Engineering, says he estimates that 9,000 to 9,500 workers have so far been recruited by the manpower companies, and that only 500 to 1,000 more will be absorbed.
"If a foreign worker who is recruited by a manpower company does not prove that he is skilled and is worth $100 a day to the contractor, it will not be worthwhile for the company to employ him," says Kuznitsky.
|
