Founded on December 12, 1920, at the Haifa Technion, the Histadrut was created as a trade union that would organize the economic activities of Jewish workers. Attempts at such organization had been made previously but had failed due to the insistence of certain political parties on maintaining their own services for their own members. Realizing that the perpetuation of rival trade unions was counter-productive, efforts were made to establish a non-partisan, non-political organization. The organization would run activities such as the consumers union, the sick fund, and the employment exchanges. It was out of these efforts that the Histadrut was born.
The founding members were profoundly influenced by the Russian-Jewish socialist tradition characteristic of the second aliyah (1904-1914). They strongly believed in the continued building and settlement of Palestine and were devoted to the revival of the Hebrew language and of Jewish culture. As strict socialists, they firmly believed that the representatives of the workers should not earn more than the workers themselves. The opening resolutions of the first Histadrut conference expressed their goals by stating:
In 1920, membership in the Histadrut numbered approximately 4,400.
In 1922, 8,394 of the 16,608 workers in the country were members of the Histadrut. 75% of immigrants arriving in the country also became members.
By 1927, the Histadrut claimed to serve 25,000 workers, encompassing 75% of the entire Jewish Palestine labor force.
The Histadrut founded and established economic, financial, cultural, sports, and industrial institutions during the British Mandate that would enable the new state to emerge. Bank Hapoalim literally means the worker’s bank, the office of public works and building, the Solel Boneh construction company, the Kupat Holim Clalit, the largest health care provider in Israel, and many other institutions all arose from the early years of the Histadrut.
It was not until May 7, 1953, that Israeli Arabs were permitted to join the union.
Abba Eban said that
the kibbutz, the moshav, and the Histadrut are three untranslatable words for three forms of unprecedented social organization without parallel in the achievements of any other Labor Movement or national society. Those are three forms of social organization that have the grace of originality. If one cannot translate them in terms of language, it is because they do not have an exact parallel in social frameworks created by any other national society.
Until Israel began moving away from a socialist economy, the Histadrut, along with the government, owned most of the economy. It was the second largest employer after the government. Through its economic arm, Hevrat HaOvdim (“Society of Workers”), the Histadrut owned and operated numerous enterprises, including the country’s largest industrial conglomerates, the country’s largest bank, Bank Hapoalim, and the country’s largest shipping company, ZIM Integrated Shipping Services. The Israeli services sector was completely dominated by the Histadrut and the government, and the Histadrut also largely dominated public transport, agriculture, and the insurance industry. In addition, it owned Clalit Health Services, Israel’s largest Kupat Holim, or health insurance and medical services fund. Clalit was the only health fund in the country to accept members without discriminating based on their age or medical situation, but with the condition that they must also be members of the Histadrut labor union.
With the increasing liberalization and deregulation of the Israeli economy since the 1980s, the role and size of Histadrut declined. Hyperinflation saddled its business empire with enormous debts, and slow economic growth exposed its inefficiencies. Due to debts, the Histadrut began giving up its business holdings. It lost control of Bank Hapoalim in the aftermath of the 1983 Israel bank stock crisis when the Israeli government nationalized it along with other major banks.
A notable shift in power took place in 1994 when the Labor Party lost its leadership and governing role in the Histadrut, and a new party named RAM, composed of individuals who had left the Labor Party due to internal power struggles, took charge and began to sell off or eliminate its non-union-related assets and activities, proclaiming that from then on, it would function solely as a trade union.
The most severe blow came when Israel’s National Health Insurance Law came into effect in 1995, instituting a national universal healthcare framework and reorganizing the Israeli healthcare system. Under the law, Clalit’s tie to the Histadrut was severed, and Israelis were given a choice in membership between Clalit and the three other Israeli health insurance funds, which were now prohibited from discriminating against applicants for age and medical reasons. Once an affiliation with the Histadrut was no longer a prerequisite for membership in Clalit, many of its insured dropped their labor union membership, while others switched to other health funds now that age or pre-existing conditions no longer precluded them from joining. This resulted in one of the largest declines in union membership in labor history. The Histadrut’s membership plunged almost instantly from 1.8 million (almost 80% of the workforce at the time) to about 200,000 members. The loss of revenue generated from Clalit’s health insurance premiums and union dues caused an enormous decline in the Histadrut’s resources, and it was forced to sell off valuable real estate assets to survive.
The Histadrut managed to recover from its low point in membership and gradually grow in membership. Today, the Histadrut handles the professional and economic affairs of approximately 800,000 workers.
The Histadrut has influenced the adoption of many laws to protect workers, such as The Hours of Work and Rest Law, (1951); The Annual Leave Law, (1951); The Protection of Youth Labour Law, (1953); The Employment of Woman Law, (1954); The Wage Protection Law, (1958); The Severance Pay Law, (1963); The Collective Agreement Law, (1957); The Settlement of Labour Disputes Law, (1957); Male and Female Workers (Equal Pay) Law, (1964); The Sick Pay Law, (1976); The Minimum Wage Law, (1987); Single Parent Family Law, (1992); Absence Because of a Child's Sickness Law, (1993); and the Absence Because of a Parent's Sickness Law, (1993).
The Histadrut has maintained a powerful position in Israeli society since its inception. Its policies have been guided by its goals of achieving full employment as well as security of tenure for its workers. In its drive towards full employment, the Histadrut itself became the largest employer in Israel.
Sources: The Jewish Agency for Israel.
The World Zionist Organization.
Adi Dovrat-Meseritz, Haim Bior, and Tali Heruti-Sover, “Israel Averts General Strike by Increasing Minimum Wage,” Haaretz, (December 3, 2014).