The end of the year and the end of the decade is a good time to ask ourselves who we are and what we’re worth. In general, we’re worth a lot less than we think. “Jewish genius” is an urban legend, but Israeli Jews don’t have unusual abilities. “The Chosen People” or “Light Unto the Nations” we are certainly not, even if we’re talking about the best of us.
The person who has sent us the message reminding us of the mediocrity of Jewish genius is Gilad Brand of the Taub Center for Social Policy Studies (see story below). A market researcher, Brand examined what happened to the strongest and weakest segments of the Israeli labor force. His most interesting conclusion relates to the best-trained Israelis – the top 20% of the population.
What he found is that this 20% are far less talented than their peers in countries belonging to the Organization for Economic Cooperation and Development (OECD). Nevertheless, the top echelon of our labor market pays itself more than it deserves.
The principle data point testifies to how much our local geniuses don’t measure up to those elsewhere in the world. The measure of smartness is the Program for the International Assessment of Adult Competencies, or PIAAC, which measures abilities of adult workers in mathematics, reading and problem-solving.
It’s the grown-up version of the international PISA exam given to students every three years. Since it was first administered in Israel two decades ago, PISA has charted a downward trajectory for Israeli students to the point that we now rank 40th in the world. The assumption is that by the time they become adults, somehow the Jewish genius will emerge. But the PIAAC exam tells otherwise. Mediocre Jewish students grow up to become mediocre workers, and that includes even the most talented among us.
The top 20% of Israeli workers rank merely average among OECD countries. Even without Haredim and Israeli Arabs, the top 20% of Israelis ranks pretty close to average. All the countries of Northern Europe, as well as Japan, Germany, Britain, the United States ad even Estonia score higher than non-Haredi Israeli Jews.
This Jewish mediocrity appears to be a function of Israel’s poor schools. Indeed, there is a direct correlation between PISA and PIAAC. Israeli Arabs, who perform even worse than Israeli Jews in PISA, do miserably in the PIAAC test: The top 20% of Arabs in Israel rank at the bottom of the PIAAC league tables. Only Chilean and Turkish workers score worse than Israeli Arabs.
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Strangely, this mediocrity doesn’t extend to the labor market. The relatively unskilled top 20% on average earn only less 18% than their peers in the OECD. That’s a small differential relative to the skills differential. Brand shows that at the very top in Israel – the 1% – the gap is just 8%. In other words, pay at the very, very top here is almost identical to the pay of the top 1% in countries where workers are more capable.
The reason is due to where the best of the best in Israel choose to work. While in other parts of the world a talented worker can choose to be an artist, philosopher, farmer, politician or even a plumber, in Israel no such options exist. The Jewish mother gives her offspring just two options: doctor or engineer, and that’s what Jewish boys and girls choose to do (and that really does apply to both sexes). The result is the best and brightest concentrate in these two areas and their pay is higher than it should be.
There’s no reason to blame Jewish mothers. What emerges from Brand’s research is that Israel excels, more than any other country in the world, in identifying the most capable. As much as the Jewish mother is pushing her offspring into high-tech, the industry is pulling them with its seemingly limitless demand for trained workers. We don’t let the best waste their time in low-paying professions or jobs that don’t require a college education.
All this shows up in the data. No less than 28% of the most skilled non-Haredi Jewish males and 13% of the most skilled non-Haredi Jewish females are employed in high-tech. No country comes close to these rates, not even knowledge-based economies like Denmark, Ireland, Sweden or Japan.
Without question, Israel is a high-tech power that knows well how to make the most efficient use of its human capital. The combined forces of the Jewish mother and the stellar salaries of the tech sector make it all possible. The result is that the most skilled earn so well and the economy gains because labor productivity in tech is higher than in any other sector of the economy.
But there’s a price for this, because there is a shortage of the most skilled workers in other parts of the economy. The best and brightest in Israel don’t think about entering politics or the intellectual professions. It also costs us because there is excess capital – money, talent and time – invested in high-tech.
It’s time for the government to allocate resources differently. We don’t need to be providing the high-tech industry with more incentives or encourage more people to retrain and enter the industry. To the contrary, the government should be encouraging the most skilled to enter other areas, especially in helping the bottom half of the labor market.
Perhaps that doesn’t interest the tech elite, but the gap between the most- and least-skilled workers is the largest in the world and that is an intolerable situation. We need engineers but we also need technicians.