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Wisconsin II: Cosmetic Changes but still No Jobs

I

N JULY 2007, the Knesset gave final approval to a law that will replace the Wisconsin pilot, which was called Mehalev ("From the Heart," an acronym based on a Hebrew phrase meaning, "From Income Maintenance to Becoming Part of the Labor Force"). Mehalev was inaugurated with much fanfare in August 2005. Two bridesmaids ushered it in: Binyamin Netanyahu, who was then Finance Minister, and Ehud Olmert, then Minister of Industry, Trade and Labor. The avowed purpose was to bring chronically unemployed Israelis into the work force. The National Employment Bureau would be privatized on a trial basis. Four regions were selected, each under a company established for this end.

Now we face a revised plan, called "Lights toward Employment." Does the new name signify something more effective, or will it be as misleading as "From the Heart"?
"Lights," which now includes a fifth region, offers several changes. It releases a large group from having to take part. People 45 or older may once again register with the regular Employment Bureau until a fitting solution for them is found. As for clients younger than 45, "Lights" is supposed to refer those with limitations to medical specialists for diagnosis; the result will determine the number of hours they must participate. It is supposed to find suitable jobs for academics (instead of sending them to mop floors). It is supposed to provide workshops and vocational classes. And it is supposed to ensure that support services function, such as day care centers for workers' children.

A more interesting change concerns the economic model. In the earlier plan, the placement firms earned according to the number of people they removed from the dole. The new plan, instead, promises the firms a bonus for placing people in long-term quality jobs.

These changes result from the suffering that Mehalev caused to many of its participants. That suffering was expressed in persistent protests by social organizations that kept observers at the centers, studied the failures and publicized them. The Dinur Committee, appointed by the government to evaluate Mehalev, concluded that the pilot project "did not succeed in placing tools of sufficient worth in the hands of the various populations. The employment centers did not create a suitable employment horizon for most participants, and the economic model on which Mehalev was founded did not contribute toward achievement of the goals." To us these conclusions seem lip service.

The Employment Service has just published data which show that the economy is growing, unemployment is in decline, and yet the number of hardcore jobless has risen in the last three and a half years by 33,000, reaching a total of 75,000. Growth bypasses the undereducated. Government policy prefers to develop high tech. It permits firms to hire unorganized foreign workers in fields that do not require higher education, such as construction, agriculture and personal care. Here jobs are blocked to local workers. Under these circumstances, it is unclear how the government can hold out prospects of success for "Lights toward Employment," whose purpose is to bring about employment precisely for the undereducated hard-core jobless.
True, a large number of the elderly and the ill could let out a sigh of relief after being released from the new program. But that does not address the problem. Now that participation is restricted to those who can work, the real story starts. At last it will be possible to check how well the Wisconsin Plan achieves its main declared goal: to put people to work and free them from the poverty circle.

The revisions in the plan may succeed in silencing criticism. The government would like to maintain it longer in the hope of getting legislative approval to include the entire population. But it is hard to see how the changes can produce a real success, because the causes of the first plan's failure remain. These lie in the principle of privatization and the nature of the labor market.

T

he "Lights" job-placement firms, formerly of Mehalev, are basically personnel ("manpower") companies. In contrast with other such companies, however, they enjoy government money and the authority to deny benefits. Their interest in profit does not necessarily coincide with the interests of the workers. Evidence of the discrepancy may be found in the underpaid and temporary jobs to which Mehalev dispatched workers, gaining bonuses and saving the State welfare payments.
It was no coincidence that the government left the power of applying sanctions in these companies' hands. We may expect that they will continue to use this threat, forcing the participants to accept any job, suitable or not, in order to register as many names or refusals as possible.

But the new economic model (someone will object) is designed to reward the firms according to the quality of the placements. Indeed, but who will check? There are 17 inspectors for the entire country. Even if the government promises to tighten supervision this time, we should note the conflict of interests: the supervising body, namely the government, is the same as the body that initiated the program. The government has an interest in concluding that the plan is efficient. It won't hurry to expose distortions.

T

he Dinur Committee faulted the Mehalev companies, we have seen, for not creating "a suitable employment horizon for most participants." And we were under the naïve impression that this was the task of the State!

It is a dangerous thing to shift responsibility for unemployment to the private sector. This likes its workers flexible, available and temporary, foreign if possible, cheap, ready to work under any conditions, and most importantly, without conditions.
In the best case, the firms send these people to work for minimum wage, mostly in cleaning. True, that wage is bigger than the welfare benefit (although a promised increase has been frozen), but it is far from enough to lift anyone above the poverty line.

M

ehalev/Lights is not the right program for ending unemployment and poverty. The solution must come from the head as well as the heart. That is, we need a plan for the labor market. We need a set of priorities, according to which the working citizen will not be subject to the arbitrary whims of the employer, and his basic right to a sustainable existence will be respected. The government must take steps like the following: It must put an immediate halt to the import of foreign workers. It must equalize the conditions of all workers in a given industry—namely, of the local workers and of the foreigners who are already here. It must strengthen the apparatus for enforcing workers' rights. It must ensure that workers are employed directly by the companies whose products they produce, not by subcontractors or personnel firms. Where public workers are concerned, the State should take the lead and set an example.

Only radical change of this sort will lead to real jobs. Until the government takes these steps, we must conclude that it favors the Wisconsin/Lights personnel agencies. It prefers watching them bend people into the shapes that the current job market demands, rather than take decisions to improve the conditions of the workers and the economy both.

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