A Useless Service for NIS 2.6 Billion

MKs Haim Katz and Shelly Yachimovich are behaving on the basis of their hatred for the free market, and until it is destroyed and they set up an economic paradise here similar to Cuba or North Korea, they will not rest.

Knesset members Haim Katz (Likud ) and Shelly Yachimovich (Labor ) have been celebrating for the past three months. In April they managed to kill the welfare-to-work Wisconsin Plan, and they have been enjoying their success ever since.

Of course, chronically unemployed people have spilled onto the streets, and no one is taking care of them, but so what? The important thing is that these two MKs won a few positive headlines and blocked the terrible threat that loomed over the economy and society.

For months they reiterated that the Wisconsin Plan was bad because it cost the country hundreds of millions and was being operated by private companies. Alas, the cat is out of the bag. The two have proposed legislation - with the backing of several other MKs - to increase the budget of the failed Employment Service by 19 times, to the incredible sum of NIS 2.6 billion.

That sum is simply disconnected from reality, but is very suitable for Yachimovich and Katz, who have no budget constraints. In their wild imagination they are proposing that these billions be invested in increasing support for families receiving welfare (which is the opposite of what is necessary to encourage employment ). They also want the money to be invested in professional training, child-care payments for children up to 12, complete refunds for travel expenses for every day a person is part of the program, a service package to be determined by the Social Affairs Minister, bonuses for sticking with the program, and car expenses for everyone approved for income support.

In clearer terms, it's a license to fool us, because how could it be that someone who receives a state allowance and does not work (not even in unregistered employment ) has a car?

It's hard to understand why the two were not more considerate of welfare recipients. Why didn't they include in the program another little article that would have the state provide them with a car? Why should only the wealthy have one?

Katz and Yachimovich hate the free market, which is competitive and efficient. In their imaginary world, public institutions are efficient and thrifty. There are no political appointments, no ministers and MKs with ulterior motives, no hidden unemployment or advancement based on who you know instead of merit. So they hate the Wisconsin Plan because it showed the Employment Service failed to find jobs for any of the chronically unemployed, while the Wisconsin Plan succeeded in 18,000 such cases. It thus completely altered people's lives for the better.

Every research institute that examined the Wisconsin Plan recommended expanding the program, not closing it. Extensive research by the Brookdale Institute concluded that the plan was much more successful than the Employment Service, with much of its success among poorer people. The Bank of Israel concluded that "the Wisconsin Plan should continue and be expanded to a national level, while correcting any deficiencies."

The deficiencies were corrected. A December 2008 report by the Israeli Academy of Sciences also recommended expanding the program nationally. International organizations like the International Monetary Fund also recommended expanding it. But all this made no impression on the Knesset's populists.

Even the Ministry of Industry, Trade and Labor was recently forced to admit that the Employment Service was nearly irrelevant for people seeking employment. Ministry officials concluded that only 4.5 percent of those turning to the Employment Service found work. If they had included people with university degrees, the rate would have been even lower. The research also showed that the employed, unemployed and employers all consider the Employment Service an irrelevant institution, so they hardly ever turn to it because the service has become expert at one thing: granting approval for unemployment payments.

But facts are of no interest to Yachimovich and Katz. They are behaving on the basis of their hatred for the free market, and until it is destroyed and they set up an economic paradise here similar to Cuba or North Korea, they will not rest.