Emigration is again causing a stir in Israel, whether it’s described as a brain drain or ascribed to people’s inability to make ends meet. Is there something wrong with the moral values of Israelis leaving for greener pastures, or is such criticism perhaps misplaced? Many ethical and political questions such as these are being raised but the phenomenon has mainly exposed the dismal morale among large sections of Israel's elite. Those in a position to pursue their professions abroad, who actually tend to be more highly educated and better off, seem convinced that living in Israel is nearly impossible. But before jumping to any conclusions, let's take a look at some instructive facts.
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Over recent years the Israeli economy has steadily been generating new jobs at the rate of 100,000 to 120,000 a year. Job growth is a key economic indicator as it points to the most basic form of economic security, the ability to earn a living. Figures show that this growth has been maintained here over the years. Israel's job market has seen consistent improvement over the past decade. After peaking at 12% during the economic crisis of 2003, the unemployment rate fell to an unprecedented low last month of 6.1%.
Moreover, the drop in unemployment came hand in hand with steady growth in the rate of job market participation, mainly among Haredi men and Arab women. This also reached an unprecedented high over the last year of 78.7% (ages 25 to 64), marking an amazing turnabout within a decade. From a country considered relatively backward in its rate of job market participation, Israel is now ahead of the OECD (Organization for Economic Cooperation and Development) average of 76.5%, and even leads the U.S. now in this category.
No less remarkably, these two developments – the drop in unemployment to an all-time low and the rise in job market participation to an all-time high – occurred simultaneously even though they normally counteract each other. This could be considered no less than an economic miracle.
The miracle was made possible by continued growth in the number of jobs created by the Israeli economy, enough to supply work for people joining the workforce for the first time while also providing replacement jobs for employees who found themselves suddenly on the streets. This is astounding considering the situation elsewhere around the world as the persisting global economic crisis makes it hard for other countries to substantially increase the number of jobs available.
Without a doubt, the vitality of the Israeli economy, with its ability to continue generating new jobs all the time, is indeed extraordinary and should be contributing to a feeling of prosperity and economic security. Why then is everyone complaining that things are so bad here?
A miracle, just not for middle-class
One reason given is that the jobs offered in Israel are substandard – mainly part-time jobs and at low pay. But Central Bureau of Statistics figures don't bear this out and don’t indicate any sharp increase in part-time jobs.
A better explanation is that the economy steadily makes more jobs available, but not at higher pay levels. The average wage has barely risen in recent years, so the fortunes of a family with two breadwinners have hardly improved due to this economic miracle that has bypassed the middle class.
The miracle, however, has been of great benefit to anyone needing a job. It allowed anyone previously outside the workforce to gain entry quite easily. As a result, poor families without a breadwinner or struggling on one paycheck succeeded in gaining additional income. Although such families remained poor, their conditions substantially improved and Israel's socioeconomic gaps consequently became narrower.
The ability of the unemployed to rejoin the workforce after losing their previous jobs has also improved, giving them a big boost financially. The personal crisis of losing one's job is often accompanied in Israel by a relatively quick move to another workplace. This feature of the job market improves the position of all the country's workers, including those of the middle class, by strongly improving their sense of job security. The middle class isn’t aware of this, though, as long as it doesn't face the prospect of becoming unemployed.
A further explanation is that while job security is critical, it obviously isn't a panacea for all the economy's ills, such as the high cost of living plaguing many working couples.
Finally, there is the psychological explanation of existing reality. We have gotten so used to the vitality of an Israeli economy that keeps generating jobs all the time that we take it for granted. The situation of Israeli workers is certainly much better than for their counterparts, especially the young, in most developed countries, where the ability to find work is far from being taken for granted.