Should Sunday be a day of rest in Israel? In July 2011, Vice Prime Minister Silvan Shalom reawakened public debate when he proposed that the Knesset enact legislation that would make Sunday an official day off from work and would give Israel a long weekend that would be in sync with the rest of the world. IDI's Matan Shefi interviewed Senior Fellow Prof. Avi Ben-Bassat, former Director General of Israel's Ministry of Finance, who opposes the proposal on the grounds that it will shorten the workweek, decrease salaries, and negatively impact the standard of living in Israel. As will be seen below, Prof. Ben-Bassat believes that this is populist legislation and that the public is not being fully informed of the ramifications of the proposed change.
Should the current structure of the days of rest in the Israeli economy be changed?
One argument that is currently heard is that Sunday should be designated as a day of rest in order to bring Israel in synch with the rest of the world. It is worth noting that the length of the period of rest at the end of the week in Israel is identical to that of the rest of the world. In Israel, like in other countries, there are two days of rest. It is only the timing of those days that is different; in the rest of the world, Saturday and Sunday are the days of rest, whereas in Israel, Friday and Saturday are the days of rest. Thus, in terms of the total amount of rest days, Israel is already in sync with the world. It should also be noted that the difference in the timing of Israel's rest days is not random; it stems from consideration of the needs of religious Jews and of the Muslim Arab community in Israel. In the past, Friday was a short workday, in which only five hours of work were required, but it was turned into a day of rest in order to enable more time for preparation for Shabbat by observant Jews.
The current proposal—and this must be put on the table—is essentially a proposal to shorten the workweek. If the proposed change is implemented, the number of hours in the Israeli workweek will decrease, the new distribution of work hours over the course of the week will be less effective, and as a result of these two factors, the GDP per capita will decrease.
Why will the proposed change negatively impact efficiency?
There are two reasons. The current proposal would reinstitute five hours of work on Friday and would add half an hour to each workday. Firstly, this would cut the workweek by approximately two hours (depending on the norm in the workplace), as compared to the current situation. Secondly, the hours that will be added to the workweek in order to compensate for the loss of work on Sunday are not as effective as work hours on Sunday. Past experience has shown that Friday was not an efficient workday; many workers prepared for their weekend activities during work hours, whether in the workplace or by leaving the office to go shopping. In addition, there are workplaces in which fixed costs are incurred for opening the workplace, whether it is for a full day or a part thereof. As a result of these factors, the employer incurs a high expenditure for each hour of work, but gets lower value from the employee in return.
Adding half an hour to each workday would also affect efficiency. Research in economics has shown that as the workday lengthens, the marginal productivity of the workers declines; in other words, the last half hour of work is considerably less effective than the half hour before it.
Some people claim that the proposed legislation would synchronize the activity of the markets in Israel and in Western countries and would thus improve Israel's standing in the global economy. What is your opinion?
Although Israel recently joined the OECD, Israel's GDP per capita is at the bottom of OECD countries. Shortening the workweek and decreasing the efficiency of work will lower the GDP per capita even more and will further damage Israel's standing among those countries.
As for synchronizing the markets: The advocates of the proposed legislation claim that the change will help Israel reach full synchronization with the economic systems of Europe and America, where Sunday is a day of rest. This problem was already confronted when Israel stopped working on Friday. As a result, those economic systems in Israel that require full synchronization with the world markets—such as the foreign exchange departments of banks or the foreign exchange department of the Bank of Israel—already work on Fridays and have Sundays as a day of rest, which enables those systems to be synchronized at low cost.
Will a decrease in efficiency lower the standard of living in Israel?
Proponents of the proposal argue that the institution of Sunday as a day of rest in Israel would increase economic activity by increasing consumption. Since Sunday would be a day for leisure and shopping, profits of retail chains and their employees will increase, as will the profits of manufacturers. This argument contains two errors. First, studies show that the extent of consumption is determined primarily by income level, rather than by the amount of leisure time people have at their disposal. Accordingly, not only will shopping not increase, but shopping and consumption will actually decrease because the level of income per capita will fall. If shopping and consumption do rise, savings will decline. This decrease in savings, in turn, will harm the ability to finance investments in factors of production, such as new machinery, infrastructure, and equipment, all of which are essential to economic growth. Any way you look at it, it is absolutely clear that in return for increased leisure time, efficiency will be affected and Israel's GDP per capita will decrease. I do not think Israel needs more leisure time at the current stage of the development of its economy,
I also do not believe that the public is going to want its workday to increase by half an hour on the four long days in the workweek. There is also a good chance that in many workplaces, this increase will be a fiction—and I say this from experience. When Israel shortened the workweek from six days to five days by dropping Fridays and extended the workday during the week, similar phenomena occurred. Employees came up with all kinds of arrangements and bypasses In order to avoid actually working more hours. For example, a workplace that had given its workers a 40 minute lunch break before the reform, shortened that break to 10 minutes with the consent of the employees, but continued to operate its cafeteria. Needless to say, no one ever went to the cafeteria, got food, finished eating, and returned to the office within 10 minutes. But while the lunch break essentially remained the same, the workers were paid for about thirty minutes of work that they did not do. This is a decrease in efficiency. If we really extend the workday, productivity during the last half hour will be low; if we create fictions, the damage to productivity will be even more severe. Either way, production costs will increase and the ability of the Israeli economy to compete with world markets will be negatively affected.
Which sectors will benefit from the change and which will lose?
Adding work hours at the end of each day will primarily impact working mothers, who traditionally carry most of the burden of child care. Women will need to leave work early to pick up their children from school or preschool and spend time with them. This will violate the principle of equal opportunity for women in the workplace and will limit the ability of women to advance professionally. Alternatively, families will have to pay more for day care. Even today, working mothers have trouble advancing in their careers because they carry most of the burden of child care, although employers may not admit it.
Some people claim that the proposed legislation will help disadvantaged groups by providing them with increased leisure time. I do not think this is true either. If indeed this change brings about a festival of consumption during the new long weekend, then service providers—salespeople, maintenance workers, etc.—will have to work on Sundays, while everyone else rests. These employees already belong to the weaker groups in the economy. In my opinion, the people who stand to benefit from this proposal are people with high incomes. Leisure is a "consumer item" and is even a luxury; the higher your income, the more you want to spend on leisure. In contrast, people with lower incomes—who are generally service providers—will have to work on the proposed day of rest and will not be able to enjoy the leisure that this day of rest is intended to facilitate.
What about the Muslim Arab sector?
I'm not very familiar with Muslim culture. I understand that religious Muslims work partially on Fridays. But it is clear that they would be hurt if Friday afternoon would be made into a workday; after all, when Friday was first instituted as a day of rest in Israel, the change was made partially as a result of consideration for the Muslim Arab community, for whom not working on Friday is appropriate.
I think that the proposed change will eventually lead to the cancelation of work on Friday completely, because the quality of work that is done on this day will be low, and eventually the pressure not to work on Friday will increase, especially among the religious population. And a transition to a four-day workweek is a luxury that Israel cannot afford at present.
What about anticipated changes to salaries and changes that would have to be made to collective agreements with employees?
Many people assume that shortening the workweek will not result in wage cuts. Since the shortened week will result in higher costs per hour of work, it will decrease the ability of the Israeli economy to compete with foreign economies. It thus appears that the advocates of the proposal did not devote sufficient time and thought to an analysis of the ramifications of decreased efficiency and increased production costs. What they appear to have been concerned about is the well-being of a specific sector of the religious-Zionist community of Israel, who observe Shabbat and would benefit from an additional day of leisure. While I believe it is important to be concerned about the welfare of all groups, this proposal will not improve the situation of Israel's ultra-Orthodox population, who apparently is not seeking more hours for shopping and leisure. In my opinion, it is not reasonable to make a change with such far-reaching implications, at such great expense, in order to slightly improve the welfare of a particular population group. Perhaps in the future, when Israel's GDP per capita is higher and we all want more time for the consumption of leisure, it would be appropriate to consider such a proposal.
Do you think that this proposal will change the nature of the day of rest, as compared to the present situation?
Religious Zionists tell me that it bothers them that the range of activities that they can do on Fridays is not comparable with the range of activities that is available to the secular population on Shabbat. They complain that they do not have a day in which they are able to go on trips, to visit relatives, to shop, etc. This argument is also exaggerated, since it is possible to shop on Friday until close to the start of Shabbat and a full day is not necessary for this purpose. Although the variety of specific activities that are available to this population is limited, this does not justify a dramatic change to the efficiency and functioning of the Israeli economy. I also do not believe that the proposed change will change the nature of leisure in Israel. The public's consumption of leisure is largely determined by its world view, its way of life, and its priorities. Adding leisure time will not change the nature of the way leisure time is spent today.
Are you saying that there is a subsection within the religious population-that is, people who have high incomes-who feel that they are subject to discrimination, as compared to the secular population?
According to the media, a large segment of the public supports this change, not just the religious community. But this support, in my opinion, is based on partial information. If you offer anyone more leisure time, they will be happy to take it. The problem is that the people who are extending the offer are not informing the public of the price. The cost of the proposed change is that per capita income will be reduced and there will be workers whose salaries will be cut. If this were to be presented to the public, I do not believe that support for this measure would be so widespread.
Would you describe the proposed legislation as populist?
Absolutely. This is a populist proposal. When you look at the religious-Zionist community, this proposal is trying to address a real need of the community. But the general public is being presented only the benefits of another day of rest and none of the drawbacks. They are not being informed of the decrease in wages that is anticipated as a result of this change or of the negative impact to the ability of the Israeli economy to compete and grow. Who wouldn't be happy to get an extra day of leisure? But if we would only tell them that per capita income is going to decrease as a result, it is likely that many people would react to the proposal differently.
Prof. Avi Ben-Bassat is a Senior Fellow at the Israel Democracy Institute, a Professor of Economics at the Hebrew University and the former Director General of Israel's Ministry of Finance.