CSRwire Talkback

By Jeffrey Hollender

Jeffrey Hollender, co-founder and former CEO of Seventh Generation, was in Israel in early October as part of a US State Department visit in partnership with the Milken Institute Israel Center to discuss corporate social responsibility. His observations from the visit:

As we entered Tel Aviv from Jerusalem late on October 3rd, the last of the tents had disappeared. The dismantling of the flagship encampment of the social protest movement on Rothschild Boulevard, part of a national movement that brought more than 400,000 people into the streets to protest social inequity, represents only a pause in an inevitable process that will forever change Israeli society.

Israel mirrors the social inequity that plagues the US today. Consider this: 

• Inequality in Israel, as it is in America, is worse than Egypt, Tunisia or Yemen;
• In Israel, unemployment sits at 18.9 percent, about 25 percent higher than the average in developed nations. For Arab-Israeli males, the unemployment rate is 27 percent and for ultra-Orthodox Israelis, the unemployment rate is a staggering 65.1 percent;
• At the end of 2008, 32.3 percent of families in Israel lived below the poverty line, before tax and welfare adjustments;
• The average compensation for senior Israeli executives employed by the "Tel Aviv 25," the top 25 public companies, is 500 times the compensation received by the average worker; and
• From 2005-2007, Israel produced more millionaires per capita than any other country. In fact, the net worth of Israel's 500 most richest people exceeds one-third of its total GDP.

For further context, almost six percent of all Israeli citizens participated in the protest. That’s the equivalent of a demonstration here in the US that would draw close to 20 million people out into the streets. This, the greatest popular protest movement in Israel's history – driven by university students – aspires to bring about a profound social revolution. 

Similar to the protests that began on Wall Street, leaders are hard to identify. This was a movement of the people, by the people, and for the people.

Ha’aretz (or, The Marker), the leading Israeli-English language newspaper reported that the protest is "the most encouraging movement that has emerged in Israel in recent years, one that for a moment aroused civic society from its prolonged coma… At stake is not only the future of the protest but the future of Israeli society, and failure now will be irreversible for many years to come."

What’s Behind the Israeli Protests?

The Trajtenberg report, a 267-page of governmental recommendations for economic reform, fell far from meeting all the demands of the protest. Daphni Leef, a spokeswoman for the student demonstrators noted: "That's their method, divide and conquer. But the truth is the opposite of that. Do you really think you would be able to fool us as you have fooled us until now? No, that won't work anymore."

Protest leaders unanimously rejected the Trajtenberg recommendations, calling for more fundamental changes. However, on October 9th, the Israeli government voted 21 to eight to approve the recommendations, which specifically propose raising taxes on the wealthy and on corporations. The recommendations still need to be approved in the Knesset and any legislation resulting could take more than a year to implement.

Leef says Netanyahu had a month "to offer us real suggestions, serious ones," adding that, on October 29th, "just as the Knesset is due to return from its break, we will return to the streets in full force. We will not give up, leave, quiet down, or rest, we don't have to run to politics, we have a massive civilian element. We will vote with our feet."

Protesting Business Who Raise Food Prices

Several months ago, Itzik Alrov started "the cottage cheese boycott" to protest excessively high prices being charged by the nation’s leading dairy companies. Rarely has a boycott in the US spread so quickly and brought about sweeping changes by the businesses targeted. 

The success of the larger social equity and cost-of-living protest movement began four months earlier, instigated by frustration over the soaring price of cottage cheese. Leaders of student groups protesting the cost of living joined forces with leaders of the "cottage cheese protest" to meet with corporate leaders and present their demands.

The boycott initially targeted the Tnuva dairy products company before eventually expanding to Osem, Telma and Strauss, with demands that they, too, reduce prices of their products. The three food manufacturers are among five big companies who supply 40 percent of the food to Israeli consumers. Each one of them has a near monopoly in one market sector or another.

Their goal: An astounding 30 percent price reduction.

Ha’aretz reported that protestors feel that nation’s failure to take action on a lack of price controls has forced people to reduce consumption and choose between buying inferior goods or paying more for items that were previously more affordable.

"We realized that we must take control of our lives and our futures as citizens of the state and to launch a consumer struggle against the retail chains and the big companies, which contribute to the high price of goods, but without causing damage to workers and their families," said Uri Rechtik, a protestor.

He continued: "The boycott is a means, not an end in itself. It is the only democratic tool available to us as consumers, as long as the state does not do its part in solving the problem of the high cost of living. If the three of them (Osem, Strauss and Telma) don't reduce prices, there's a good chance that we'll lead a consumer boycott against one, two or all three of them. We are examining all of the options."

Protesters are calling for the companies to cut their regular prices, but not at the expense of employees. Instead, they would rather see cuts come from shareholder earnings, marketing budgets and other sources.

What Has Been Accomplished?

On October 2nd, Zehavit Cohen, chairwoman of Tnuva Food Industries Ltd., the primary and initial target of the boycott, announced her resignation. Soon after, the company announced a wide range of price cuts. Shortly thereafter, Tnuva announced the company would be lowering the prices of its products by 15 percent. According to Tnuva, the cumulative worth of the price reductions will be 125 million shekels (about $34 million), 62 percent of which will be paid for by the company.

Meanwhile, the boycott of Tnuva continues despite the company's announcement that it would be lowering the prices of dozens of products by as much as 15 percent. Not only is Tnuva still on the blacklist: the boycott has expanded to its subsidiaries Sunfrost, which makes frozen vegetables, and Mama Off, which makes frozen processed poultry products. Sales on many products have declined by over 25 percent.

On October 7th, Ha’aretz reported that: "The organizers of this summer's social protests are busy planning their next steps, as they are far from satisfied by the recommendations of the Trajtenberg committee on socioeconomic change. Stav Shafir, one of the tent camp protest organizers, is preparing a strike by students when the universities and colleges are scheduled to start their new academic year at the end of this month, immediately after the mass protest rally planned for October 29th."

By October 30th, the government did indeed pass the Trajtenberg tax proposals – with company tax to rise 25 percent and the highest marginal income tax rate to rise 48 percent.

About Jeffrey Hollender

Jeffrey Hollender is is the founder of Jeffrey Hollender Partners, a business strategy consulting firm and the co-founder and former CEO of Seventh Generation, which he built into a leading brand known for its authenticity, transparency, and progressive business practices. For more than 25 years, he has helped millions of Americans make green and ethical product choices, beginning with his bestselling book, How to Make the World a Better Place, a Beginner’s Guide. He went on to author five additional books, including The Responsibility Revolution and Planet Home. He is the Board Chair of the Greenpeace Fund US and a board member of Verite as well as the co-founder and Board Chair of the American Sustainable Business Council. Please visit www.jeffreyhollender.com to learn more and visit Jeffrey’s blog. He can also be found on Twitter (@jeffhollender) and on Facebook (http://www.facebook.com/pages/Jeffrey-Hollender/319679691645).

Readers: Can protests elsewhere, such as the Occupy Wall Street movement, have an effect as great as seen in Israel? Tell us what you think on Talkback!