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Israel Needs a Better Welfare Policy to Recover From COVID

Sami Peretz
Sami Peretz
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Volunteers preparing food donation boxes for families in need ahead of the High Holy Days
Volunteers preparing food donation boxes for families in need ahead of the High Holy DaysCredit: Tomer Appelbaum
Sami Peretz
Sami Peretz

The narrow victory of the Social Democrats in Germany, like U.S. President Joe Biden’s hard left turn – raising taxes on the rich and using the money on social programs for the poor and middle class – raise the question of whether, after three decades of aggressive capitalism, social democracy is coming back.

In Israel the coronavirus crisis, and perhaps also the presence of Meretz and the Labor Party in the governing coalition, has created among many an appetite for an expansionary fiscal policy, broad social safety nets and an increase in the government’s commitment to provide well-developed social, health and educational services and infrastructure. But when it comes to Israel, it’s best not to let one’s expectations get too grand. We are still dealing with the consequences of the pandemic, and will be for quite some time.

The new Israeli government including the socialist Labor and Meretz parties Credit: Emil Salman

If the world is bearing slightly to the left, it is not because of the pandemic, but rather because of what many people have discovered as a result of it: Major crises require massive government intervention: The state must raise debt and deficit ceilings and take on more responsibility. The public systems are crucial when it comes to dealing with crises, and have nothing to do with party ideology. It’s a matter of survival. No government can survive a major economic crisis without using the country’s resources to meet urgent needs when people lose their livelihood and fear for their health.

And so just because the government under former Prime Minister Benjamin Netanyahu extended unemployment benefits, gave loans and grants to businesses and the like does not mean that Israel is going the way of social-democratic countries. This was an ad-hoc policy under extreme circumstances.

The great difficulty in creating welfare policies in Israel is in the heterogenic nature of our society. Such heterogeneity produces major differences in rights and duties, in military service and rates of participation in the workforce. It also generates a low level of social solidarity, a factor that impedes the creation of a social democratic model and a welfare state.

What does work? Using political power to achieve specific goals. That’s what the ultra-Orthodox parties did when they were able to promote a sectorial welfare policy under Netanyahu – support of yeshivas, funding yeshiva students and subsidizing dental care for children up to age 18. The latter can be considered a sectorial benefit, given the large number of children in ultra-Orthodox families. That is also what the United Arab List did when it used its political power to obtain a commitment of tens of billions of shekels for the Arab community. As a rule, this is what groups with strong lobbies do, like obtaining additional retirement benefits for veterans of the career army, which were finally regularized after years of being granted without a legal basis, while the salaries of soldiers in compulsory service were not raised despite the promise of Finance Minister Avigdor Lieberman.

None of this can be called solidarity or closing socioeconomic gaps. Rather, it’s about squeezing what you can out of the system. Sometimes this produces achievements that affect broad interests, but most of the time it improves the condition of one group at the expense of another.

The eclectic composition of the current government assures that this Israeli model is not about to change, but this does not absolve it of responsibility for dealing with problems made worse by the coronavirus crisis, first and foremost the huge gaps. The great challenge faced by the government is dealing with the victims of the crisis, identifying and reducing gaps created between those who lost their jobs or their businesses and those who were able to prosper, between those were able to get used to distance learning and those who dropped out of school and university or lost a year of study. The government must provide people with the tools to join the labor market and return to school. It must reduce gaps, not make do with the fact that the national accounting figures look good thanks to the high-tech high tide.

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