The Histadrut was founded by members of the second Aliyah. It was established to provide a workers' union in Palestine..
Many members of the Second Aliyah, a wave of Jewish immigrants to Palestine from Eastern Europe, were committed to socialism and fought for the ideals of Jewish labor, known as Avodah Iv'rit. These immigrants also founded socialist Zionist groups such as Hapo'el Ha'tza'ir and Paolei Zion. In 1914, they attempted to establish a national labor union called the United Commission of Palestine Workers, but it was short-lived. In 1920, after renewed efforts, the workers in Palestine were able to organize themselves into a united front called the Histadrut. The founding conference, held in Haifa, 4,433 voters paticpated in electing delegates. The opening resolution stating that the organization's aim was "to promote land settlement, to involve itself in all economic and cultural issues affecting labor in Palestine, and to build a Jewish workers society there." This resolution set the stage for the Histadrut's development into a unique labor organization that not only focused on workers' rights, but also established powerful institutions to help establish a Jewish state in Palestine. These institutions included subsidiaries such as Solel Boneh, which became the country's largest builder, a newspaper called Davar, a bank called Bank Hapoalim, large stores called Hamashbir, and large industrial enterprises called Koor. This system was effective during the early years of the founding and development of a Jewish state, but in recent years the Histadrut has found itself on both sides of the bargaining table in many labor disputes." It has divisted almost all of its industrial holdings/