Israel, land of opportunity - restrictions may apply

The data on social and economic mobility in Israel is shocking: If you aren't born to the right parents, or can't land a job with a fat-cat monopoly, your chances of advancement are vanishingly small.

Hagai Snir - Hadar Cohen
Hagai Snir with his family. / Photo by Hadar Cohen
By Hagai Amit
Published 02:14 01.02.12

Michael Ben Sheetrit grew up in a poor, religiously observant family, in a poor neighborhood of Beit Shemesh, as one of 11 children with a father who did not work. At the age of 15, Ben Sheetrit transfered from his ultra-Orthodox yeshiva high school to a state school. He dropped out a year later, unable to close the gaps in his education in core subjects.

He ended up in Tiberias for a time, picking up temporary jobs as a waiter, a video store clerk and in a barber shop. Today, however, he is principal of the Branco Weiss technological school in Modi'in. He has an education degree and lives in a nice house.

Kobi Sudri was born into a poor, nonreligious family in Lod and grew up without close parental supervision. He, his mother and his violent stepfather moved frequently. Sudri never had his own room, and slept in the living room with his grandmother. He went to eight different schools in 12 years, and began working when he was 15. Today he is a successful criminal lawyer, with his own firm.

Eyal (not his real name ), 38, owns a cutting-edge digital media firm with around a dozen employees. He has a behavioral sciences degree from Tel Aviv University and lives in central Tel Aviv with his wife and their two children. "I'm Mizrahi and was born in Bat Yam, my parents have elementary-school educations," Eyal said. Of his two older brothers he said, "One is a soccer player, the other is simply a parasite."

These are just three of myriad, almost commonplace, stories of social mobility in the Israeli context, where equal rights and opportunities are guaranteed by the Declaration of Independence. Compulsory education, together with antidiscrimination laws, should make socioeconomic mobility available to everyone.

But had Eyal, Michael or Kobi been born 10 years later they probably would have found it more difficult to climb their way up from the bottom.

According to a recent study by the Finance Ministry that is due to be published in the Israel Tax Quarterly, wage mobility has been on the decline in Israel for decades and fell particularly steeply in the past decade. Galit Ben Naim and Alex Belinsky found that socioeconomic mobility is relatively low for a Western country.

In some ways Hagai Snir, who works at a Tel Aviv falafel stand, is more typical of today's average Israeli than the three examples given above. He was born in Jerusalem and grew up in Jaffa with seven brothers and sisters. His father was a priest in Jerusalem's Armenian Quarter before he married a Jew. After completing military service Hagai, like his brothers, went to work to help support the family.

He is proud to say he "is standing on his own two feet," and has neither a history of drug abuse nor a prison record. He and his wife pay NIS 6,500 a month for the four and a half room apartment in the pleasant Tel Aviv suburb of Ramat Gan where they live with their two daughters. Snir has been at the falafel stand for eight years, working from 7 A.M. to 9 P.M.

Even with his wife's salary, they can only dream about buying the apartment they now rent, which would cost more than NIS 1.5 million.

"I've gone to banks and said to them, I've managed to put aside NIS 100,000 in savings, give me a mortgage so I can buy a home instead of throwing the money away on rent, but young people aren't given a chance to advance in this country," Snir said.

The researchers, using salary data from more than one million Israelis, found that between 2003 and 2009 the likelihood of the lowest-earning 10% (with a monthly salary of NIS 3,300 or less in 2009 ) climbing into a higher earning bracket shrank.

Belinsky and Ben Naim tracked their subjects over the six-year period. They found that on average, during that time 65% of the people in the bottom 10% in one given year were there in the next as well. Overall mobility also decreased during the six-year period: While in 2003 49% of those in the lowest decile remained there in 2004, 56% of those in the lowest decile in 2008 remained there in 2009.

The 'sticky-floor effect'

Prof. Dahlia Moore, dean of the department of behavioral sciences of the College of Management in Rishon Letzion, calls this "the sticky floor effect": "You become stuck to the bottom ... When you're very poor and have no resources, you can't market yourself effectively. You can't go into a job interview with self-confidence, with an impressive job history, neat and well-dressed. You perpetuate the inferiority," she said.

The top rungs of the ladder are even stickier than the bottom ones: If you were in the top 10% of earners, with an average monthly salary level of about NIS 24,000, your chance of staying there the next year was 86%. The lack of downward mobility is even more profound for the top 1% and the top 0.1%.

Socioeconomic mobility, by definition, reduces and compensates for financial inequality. It is also one of the hallmarks of a developed nation. One of the reasons for emigrating is the desire to improve one's chances for economic advancement.

According to the report Israel is less mobile than the United States and European Union member states, and the gaps are only growing.

Less economic mobility also means less economic productivity. As Moore said, "When there's mobility people have something to aspire to. If there's no chance for advancement at a workplace it leads to frustration that causes people to be less productive." Without opportunities for advancement, she said, "people avoid responsibility, they have no ambition and they don't make an effort. That has a high price for society. Satisfaction decreases, and social tensions and frustration increase," Moore said.

And in fact, the focal points for social unrest in Israel - the ultra-Orthodox and Arab communities, the Ashkanazi-Mizrahi rift, the recent protests by the middle class - all come down to the lack of upward mobility. The limited opportunities available to Israelis from Bnei Brak, an Arab village or outside the center of the country is reflected in an absence of social mobility. The growing decline in mobility may reflect a growing intensification of these gaps.

Getting a headstart

Eyal returns to his childhood to find the key to his success. He relates that his mother made sure that he and his siblings went to a good elementary school, adding, "And when I got there I immediately made friends with the top students. We were four close friends, and we all went far," Eyal said, noting that one is a professor at the Weizmann Institute while another is a doctor at Tel Aviv's Ichilov Hospital.

"I remember that after elementary school, even though I had good grades the Education Ministry advisers recommended that I to study mechanics," based on various aptitude tests. Eyal said he bucked their recommendation and was admitted to a highly competitive academic high school, while his siblings went to another high school and did not take the bagrut matriculation exams. "I remember that when I studied or did homework my extended family saw it as weird," Eyal said.

He served in Military Intelligence, where his peers were ambitious and high-achieving, and went on to pursue academic studies. "You could say that high school and the army put me on track," Eyal said, noting that he learned from people who grew up in a different social milieu how to behave in order to attain social mobility.

Dr. Rachel Pasternak, a department colleague of Moore's, describes what she said was the forced integration, beginning in 1968, of students from the social or geographical periphery into "good" schools.

Because the school system hadn't prepared for integration, only 15% of the students became upwardly mobile," said Pasternak, who is editor of the school's journal, Kaveret. "Many people said at the time that the integration was worth it for that 15%. Today there's no integration enforced by a Knesset resolution. Israeli society is increasingly split into tribes and various social groups, and is isolated and fragmented. Of course mobility decreases," Pasternak said.

"The fact that the children of the poor receive an inferior education is a significant cause of the lack of mobility," a senior educator said. "Parents with means push their children forward, and other parents don't. The result is that people get stuck where they are. The resources of the system are meager, the quality of teaching is declining. The way to improve mobility is a better education system that offers the same opportunities to every student," he said.

According to Pasternak, there has been no uniform education program for the past 10 to 15 years. "Education Minister Gideon Sa'ar removed the Core Curriculum Law from the agenda. A sixth-grade student in Tel Aviv's Hatikva neighborhood doesn't learn the same things as a sixth-grader in Tel Aviv's Ramat Aviv. The state provides the minimum, and every school now has an association that funds study programs at the parents' expense. There is no equal education," she said. The widening gaps in the education system are part of a broader collapse of the Israeli welfare state that has also seen a rise in private spending on health care despite universal, compulsory health insurance.

The army as social leveler

The turning point in Ben Sheetrit's life came when he turned 18 and, instead of trying the draft like many of his peers, enlisted. He attributes his decision to a desire to belong, to be like everyone else. "I knew the army could extricate me from where where I was, I knew that if I finished the army I had a chance," he said.

He became one of "Raful's Boys" (participating in a program for disadvantaged youth initiated by the late IDF Chief of Staff Rafael Eitan ). He said the army was the first framework where he received support, and where the counselors fought for him to stay even when he sought a discharge.

"The army gave me the first push," Ben Sheetrit said. "Before that I had no faith in my abilities because in high school my problems weren't addressed. I lived on the social periphery, the framework didn't support me and the society around me consisted of a lot of drugs, poverty and other problems. To be socially mobile in such a situation is very hard, because over the years you accumulate gaps in knowledge relative to your surroundings."

Ben Sheetrit learned how to drive a truck in the army, and after completing his service he worked as a truck driver for Elite Food Industries for four years. It was at Elite that he met Ravit, his future wife.

He said the experience of living with Ravit on the moshav where she was raised exposed him to "a higher class" of people, who had ambitions and realized them. "I said, if they can do it so can I. I felt I could do more, that I was worth more, and that if I worked hard I would achieve more," Ben Sheetrit related.

For Sudri too, the army was a lifesaver. He left home when he was drafted, at 18, for a long time staying at the base even during weekends and leaves. He served in the Military Police investigation unit and was discharged with the rank of major, the commander of the undercover agents unit.

"I improved my matriculation grades in the army," Sudri said. "Afterward I went to a in which the army sends you for two years to university. I earned an economics degree from Bar-Ilan University and began to study law at the College of Management. I went back to serve in the army after receiving my bachelor's degree. And then I was discharged, completed my internship and my master's degree in law and within two years I was a certified lawyer."

When he tries to analyze what could contribute to social mobility, he said "The existence of social frameworks that are not based on class, like the army - which in Israel is an outstanding melting pot, which offers opportunities unrelated to racial or ethnic origin - is essential," Sudri said.

The importance of the army as a key to mobility could explain the declining mobility in a society in which the rates of enlistment are steadily decreasing, and the limitations on the mobility of populations that do not enlist, like Arabs and the ultra-Orthodox. As Sudri said, "There is great importance, especially in Israel, to the continuation of the people's army. Not an army of mercenaries or anything like that. It's important that everyone serve, from the settlements and from everywhere. The continuation of this glue is of tremendous importance."

In certain cases, avoiding military service can block upward mobility.

But military service can actually contribute to blocking upward mobility. "If I hadn't done the army, instead of three years of service I would have worked and today I would have another NIS 200,000. I would have bought the house I want," Snir said.

How important is a degree?

According to Ben Sheetrit, academic study is more important than military service. training is the whole story. After four years as a truck driver, with only nine years of schooling, he registered for Ahva College and began studying for matriculation. From there he went on to a bachelor's degree. "The army framework gave me a push, but in terms of social status and mobility, I took my first step the moment I decided to go to college," he said.

Today he focus on educating the students at his school for upward mobility. "Without an education their only employment opportunities will be in manual work only," he said.

One common denominator of the three success stories related here is that they all grew up in or near the center of the country. There are fewer examples of upward mobility among people who grew up in places like Yeruham, in the south, or Ma'alot, in the north, which are peripheral socially as well as geographically.

The key to geographical mobility seems simple: good, cheap public transportation. The brakes put on mobility in Israel also reflect the government's failure to provide just that.

Also crical to upward mobility is access to information - to learn about opportunities - and to credit and capital, to realize them both in starting a business and in paying for education.

Moore has an explanation for the widening of the internal gaps in the noncompetitive industries. "In these industries you don't have to be more efficient and you don't have to provide incentives for the workers. These are industries in which the executives enjoy controlling the market, both their employees and the general public. As a worker there you have nowhere to go, just as the customer has nowhere to go. And then the executives can raise their own salaries without any problem," she said.

Snir said he tried to become a firefighter but lacked the connections to do so. "Later I went to work for El Al (which was a government corporation at the time ): They allowed me to work there for a month as a contract worker and told me to leave. In Israel only those close to the plate can be hired for those things. My only chance was to open my own business," said Snir.

"You have to know how to be born into the right family," explained Idan Ofer (son of the late billionaire businessman Sami Ofer ) in 2007 at a business conference, arousing a great deal of anger at his arrogance.

But even poor parents can push their children up the ladder. Ben Sheetrit, in spite of everything, attributes part of his mobility to his childhood home. As he attests, even if he didn't receive tools for life there, "the foundation in the home where I grew up did prevent me from becoming a drug addict. My home was significant in keeping me disciplined."

When it comes to their children, Eyal and Ben Sheetrit are not counting on luck alone. Eyal has already started saving for his children's education. Ben Sheetrit said he and his wife will make sure their children get an education. "What they do afterward is their own business, but finishing high school with matriculation is an obligation that I insist on," he said. "I always tell my children: I'll pay full tuition for studies up to a doctorate. I don't promise an inheritance, but I do promise that."