Why the “occupiers” have a point – an Israeli case study

For all the protests outside St Paul’s Cathedral in London or around Wall Street in New York, many have traced the origins of the 2011 street protests to events in Tel Aviv.

For all the many successes of the Israel economy over the past decade – even this year, growth will hit the 4% mark – the housing market remains unfordable for many newly weds and the prices of standard food items are viewed as higher than necessary.

The first reforms are on the way. Manufacturers have acted positively. The government has moved. The cry of “social justice” has made its mark. Good.

And yet….

Currently, Israel has three mobile phone service providers, all making humongous profits. One of these giants is Orange /Partner, which is in the process of laying off employers, primarily from its customer support teams.

Orange blames its problems on increased competition and government interference with pricing policies. As somebody who jumped ship and moved to another company this year, I suggest that the corporate decision-makers look at their treatment of customers. “Bad” would be a complimentary description from my perspective. After all, please note where the cuts are being made.

However, the problem does not stop there. Bank Leumi has a heavy position in Partner. This financial leader has just posted a profit warning, along with its two main rivals (Hapoalim and Discount).

What is my issue?

1) I have yet to see a mention of bonuses being reduced for the top guys at the banks or the mobile companies.

2) If the banks do not have enough extra money, then liquidity becomes a problem and thus lending starts to dry up. In parallel, bank charges will probably rise to cover partially the gap.

Can you now understand the average customer / consumer / person on the street for being concerned about greed going unpunished?

Explore posts in the same categories: Business, Israel

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