Bottom Shekel / Shelly Yachimovich Forgot to Check the Details

The welfare-to-work program, MK Shelly Yachimovich declared yesterday, gives private businesses the power to revoke unemployment benefits. It is both expensive and wasteful, she said. Lobbyists are working feverishly on behalf of companies that stand to reap huge profits if the program plan is expanded. "But the voices of those who will be hurt by the program have no money to pay lobbyists," the Labor MK cried.

No disputes that Yachimovich is a star member of the Knesset and undoubtedly the most eloquent. But that has never stopped her from failing to do her homework before stating her opinion so expressively.

The facts are that the so-called Wisconsin program, which has been in operation for five years on an experimental basis, is one of the most successful social programs in Israel. These are facts, not opinions. And how do we know? Because it is also the most studied social program in Israel. When it was launched it was considered so sensitive as to warrant monitoring and recommendations by no less than four separate external entities.

Two of these were committees: one under the auspices of the Prime Minister's Office and headed by its former director general, Raanan Dinur, the other consisting of experts and headed by Menahem Yaari, president of the Israel Academy of Sciences and Humanities. In addition, academic studies were carried out by the National Insurance Institute and by the Myers-JDC-Brookdale Institute, considered the most important social research institution in the country.

To the best of our recollection the state has never before implemented such a closely monitored, punctiliously run program. The insistence on exacting implementation of such a sensitive and controversial program paid off. After studying the pilot program's first two years of operation the Dinur and Yaari committees concluded that certain corrections were necessary. In other words, the closely monitored trial was a success in that its failures were disclosed and analyzed. The new and improved program, called Orot Leta'asuka, was relaunched in 2008.

The experts have praised the program in its current format. The authors of the Brookdale study concluded unequivocally that it is more successful than the government employment agency: More persons receiving income support benefits found work, and at higher pay, than those participating in Israel Employment Bureau programs.

One of the changes to the program in the wake of the committees' recommendations was to eliminate the incentive it had given to the program operators to strip program participants of income support benefits. As a result of the change the rate of denial of benefits is no greater than that within the state employment bureau.

Take note: The Wisconsin Program no longer penalizes its participants in any way - according to an objective academic research institute. Just the opposite. Participants receive personal attention that includes vocational training, help with child care arrangements and bonuses for remaining employed. They continues to receive assistance even even after finding employment independently in order to ensure that their situation does not deteriorate again and to help them to overcome objective difficulties to joining the regular workforce.

After five years of operation the bottom line is that 45,000 recipients of income support benefits have signed up for the program. Of these, 7,500 (16%) never reported to begin the program. As an educated guess these are likely to be individuals with an unreported income source - the increased disclosure of which can also be counted among the program's successes.

Of the 37,500 individuals who participated in the program, 18,000 have found employment - an unusually high success rate of 48%. The average monthly wage of those who found work as a result of the program including part-time employment, is NIS 3,240.

For program graduates with full-time jobs the average monthly salary is NIS 3,920, more or less minimum wage and far more than they had been receiving in state benefits. One quarter of those placed through the program average a monthly salary of NIS 5,200.

The figures do not include the bonuses for remaining employed for at least four months. Nor do they include negative income tax allowances or benefits such as assistance with child care costs.

Five years of operating the Wisconsin program have cost the state NIS 475 million and saved it around NIS 500 million in welfare payments - and that's without calculating additional savings to the state in the form of tax revenues from participants whose future salaries may be high enough to be taxed.

So, while it's true that the program can be criticized for being expensive it is also true that it paid for itself after three years. Should a welfare state not be applauded for its willingness to invest great effort and money in helping its weaker members?

And isn't it a bit odd that an MK as deeply committed to social issues as Yachimovich should criticize the state for spending too much money to help the poor?