Importing Manpower, Exporting Brainpower

Olmert likes to boast about how well the economy did in 2006 - none of which is his doing - but what about the future?

Anyone out there remember that the party known as "Kadima" once had a platform? Anyone aware that this platform included an economic program? Well, one clause in this program speaks about "broadening the scope of employment" as an important tool in fighting poverty and narrowing social gaps.

So how does one go about broadening the scope of employment? By reducing the number of foreign workers, writes the author of the program. Minister Meir Sheetrit, in presenting the party platform, explained that jobs must be freed up for Israelis. "This means a drastic cut in the number of foreign workers employed in Israel," he said. Fine words, indeed.

But this week, the government, now headed by the same old Kadima, decided to increase the number of foreign workers employed in agriculture from 26,000 to 29,000. In so doing, it not only broke an election promise and reversed the decision of a previous government (Sharon-Netanyahu), but it has done harm to the lower socioeconomic sectors, to which Ehud Olmert is always pandering in his speeches.

The prime minister and the minister of agriculture put forward the proposal, and most of the ministers supported it. We need to help the periphery, said Shimon Peres. No one can work in a greenhouse in 40 degrees centigrade heat, argued Zeev Boim. No Israeli is going to take a job in the settlements around Gaza, Avi Dichter added.

And who was the one saint in the crowd? Eli Yishai, the minister of industry, trade and labor, who opposed the increase. The finance minister, Avraham Hirschson, also opposed it, but his opinion never matters much to his dear friend Olmert.

Over the last two years, the government has worked to prevent any increase in the number of foreign workers. Recently, the Ministry of Finance budget department got the contractors, industrialists and hoteliers to agree to zero growth in foreign labor until 2010. Now that agreement is in danger, because how can the heads of those sectors sit around and twiddle their thumbs when the farmers are getting another 3,000 foreign workers and they're getting nothing?

Employing a foreign worker is always worthwhile. They make no demands; they're willing to work long hours, including on Shabbat and holidays; and they're cheap because they aren't paid social benefits. But they take away jobs from Israelis in construction, industry, agriculture and the hotel business. As a result, wages drop in these labor-intensive branches, and Israelis, who have the option of unemployment benefits and income supplements, are tossed aside.

In 2000, at the height of the high-tech bubble, the industrialists tried to convince the government to let them import programmers, engineering technicians and engineers from India. But then the workers unions jumped in, and the evil decree was averted. Blue-collar workers don't have unions or advocates in high places. Even the Histadrut labor federation has abandoned them.

There is another group pushing to increase the foreign worker quota: the human-resource companies, which rake in millions as intermediaries. Some of the owners of these companies are political activists and vote contractors, who know how to press the right buttons. Once they were members of the Likud Central Committee. Now they belong to Kadima, because making a living comes before ideology.

On the other side of the spectrum, the findings of a new study released this week revealed that Israel is becoming the number-one exporter of brainpower to the United States, relative to its size - ahead of India, Pakistan, Canada and Europe. According to the Shalem Center study, the brain drain intensified in 2002-2004. While the number of Israeli emigrants with a high school education or less is stable, the percentage of those leaving who have academic degrees is growing steadily.

Globalization and the information revolution have made emigrating easier. Higher salaries and lower taxes are a further incentive. Israel's political and security situation has also taken its toll.

Combined, these two trends create a pretty grim picture. On the one hand, Israel is importing workers with low human-capital value, who add very little. On the other hand, it is exporting scientists, whose human-capital value is high; they study at the country's expense but contribute their knowledge to the United States. And the natural resources of today, as everyone knows, are education and know-how.

The brain drain, it turns out, has not passed over educated young people from the former Soviet Union, who are leaving Israel for the West, or even going back to Russia, where their salaries are higher and the tax rate is very low - only 13 percent.

And if that were not enough, half the population - the ultra-Orthodox, the Arabs, the Bedouin and the underprivileged - is not receiving the kind of education needed to integrate in the modern job market.

Olmert likes to boast about how well the economy did in 2006 - none of which is his doing - but what about the future?

Who will free us from this dangerous bear hug, which has locked us into importing manpower and exporting brainpower?