The Bottom Line / Vertigo: 3.7%
The new-old idea to close down the Employment Service - originating this time from the prime minister's office - sent shock waves through the Labor and Social Affairs Ministry. Services spokeswoman Batya Koris was asked to comment and said: "It is true our job placement rate is 5 percent - this is not because of faulty placement but in the current economic climate, there is nothing to offer the unemployed."
This sounds convincing - in an economy in crisis maybe it really is hard to find work. We therefore searched for a year when the economy was not in crisis, 1999 for instance. In his annual report, the State Comptroller examined the Employment Service's operation and found many faults, much waste, and several improprieties. One of his conclusions: "The efficiency of the Employment Service as a tool for reducing unemployment is small. In the first half of 1999, the job placement rate of all job seekers was an average 3.7 percent. The service's primary product is approving the receipt of unemployment benefits."
In other words, there isn't even a 5 percent job placement, but a ridiculous 3.7 percent carried managed by 1,100 people at 120 branches nationwide with senior positions filled by cronies of Labor Minister Shlomo Benizri. The epitome of efficiency.
The fact the Employment Service finds work for virtually nobody shouldn't surprise anyone. Former treasury economic division head Tsippi Gal-yam in 1998 uncovered research that employers rarely turn to a service that doesn't send them workers anyway.
Service employees have no motivation to work hard and find work for the next job seeker knocking on their door. It is hard, frustrating and they earn no benefit from success. Why get into a fight with an unemployed person who just wants the signature that allows him to keep collecting unemployment benefits or income supplements?
An acquaintance of mine, the owner of a large carpentry shop, had been looking for temporary workers for some time. One day he called the service, letting the phone ring off the hook, but no one answered. The following day, after no little perseverance, someone picked up. "What is your employer number?" she asked, "and I'll get right back with the data." She left him on hold for so long the busy signal kicked in. He tried again the following day in a repeat of the same ordeal.
He gave up and called a private man-power company which provided him with workers the following day. The company took a broker's fee of course, but the deal was worthwhile for all involved. A month later, my acquaintance knew he had a good worker, and offered him regular work in the carpentry shop.
The conclusion is simple. Anyone who hopes to lower the number of unemployed in Israel must close down the Employment Service. Temp agencies will seek and find work for the unemployed, and National Insurance will pay unemployment benefits to those for whom the agencies failed to find jobs. The number of job-seekers will drop and the social and economic benefits will rise.