Israel should follow Wisconsin
Welfare rolls have been swelling in most democratic states but one - the United States. There welfare reforms signed into law by President Bill Clinton in August 1996 brought a drastic reduction in the number of people, including single mothers, getting welfare assistance.
Single mothers walking to Jerusalem, demonstrating in front of the treasury, and sounding off on radio and television, have belatedly drawn attention to the rapid rise in the number of Israelis who have gone on welfare in recent years.
Welfare rolls have been swelling in most democratic states but one - the United States. There welfare reforms signed into law by President Bill Clinton in August 1996 brought a drastic reduction in the number of people, including single mothers, getting welfare assistance as an increasing number of former welfare recipients have turned to work.
It ended welfare as an entitlement, available to all the parents who qualified, and required recipients - mostly single mothers - to look for work. Controversial at first, it is now generally considered a resounding success.
Wisconsin State was the most successful in welfare reform and the number of welfare recipients has dropped by more than half.
The Wisconsin State Plan is advertised as providing "the necessary training, support services, and financial incentives for low-income parents to obtain permanent and stable employment, with access to further training that will lead to career advancement". Its success "lies in its philosophy that most individuals can become valuable members of the work force and all are capable of making some contribution through work."
Could Israel emulate the success of the Wisconsin plan? It has been said that underlying the success in Wisconsin is "a squeaky-clean political culture that believes in obligations and duties, not rights," and a very talented bureaucracy. While Israel's bureaucracy is probably as talented as any, its political culture can do with some improvement, as has just been demonstrated by the reaction of many politicians to the single mothers' demonstrations.
But the major problem facing our finance minister in enacting the much needed reform in Israel's welfare policy is not our political culture or our bureaucracy, but rather the 200,000 foreign workers that have swamped the country in recent years and lowered the going wage for semi-skilled and unskilled work, while depriving Israelis of jobs.
Accompanied by the refrain that they are being brought here to do work that Israelis will not do, their number is on the increase. Not just students of economics know that the work people are prepared to do is largely a function of the financial return they will get from working compared to the financial benefits of not working.
Foreign workers have depressed wages and our welfare policy has in increased the advantages of not working. Obviously, it is not possible to get Israeli workers to compete with foreign workers on their conditions of work. The results are there for all to see.
The government's emphasis on market economics and the intention to enact welfare reform has been greeted by politicians on the left with accusations of "Thatcherism" and "capitalism gone wild." But the real case of capitalism gone amok is the importation of foreign workers.
This clearly not in the national interest and is spawning insoluble future social problems damaging to the more disadvantaged sectors of Israel's population. It benefits narrow segments of the business community by lowering their costs of production and increasing their profits.
As they enter a sector of the economy they quickly drive out those businesses that work with Israeli labor. It is these segments of Israel's business community - reinforced by the many contractors who have sprung up to import workers from far afield to work in substandard conditions - that have successfully lobbied the Israeli government in past years.
They claimed that entire sectors of the economy would be wiped out unless the import of foreign workers continued and stalled legislation that would have rectified this untenable situation. This is capitalism in its ugliest form.
Until this obstacle is overcome we are not likely to see a substantial reduction in the number of foreign workers, the level of unemployment, or the number of welfare recipients.
When that is accomplished Israel can follow Wisconsin and reap the benefits of a much needed reform in welfare policy.
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