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The Wisconsin Bluff
Since August 2005, the Wisconsin Plan has been implemented on a trial basis in Israel. It is known here as Mehalev: “From the Heart.” The idea is to shift the unemployed from welfare to "workfare" by means of private placement companies. Any of the jobless who refuse to cooperate will lose their benefits. During its pilot stage, Mehalev has included 17,000 of the 160,000 receiving income maintenance.
On December 14, 2006, the government announced its intention to expand the program. This decision is based on the success of the Mehalev companies in placing 9000 people. The Workers Advice Center (WAC-Ma'an) decided to take a close look at this success.
We interviewed thirty from Nazareth, East Jerusalem and the Triangle (a predominantly Arab area of Israel between the West Bank and the coast). They were cleaners, seamstresses and factory workers. Their stories expose the government's bluff. Mehalev has shifted workers from welfare to work, indeed, but work under what conditions? It is work under contractors who, on inspection, turn out to be serial violators of labor laws. Each morning the women take their places in the flexible—that is, ruptured—labor market, fearful to be registered as refusers.
Cleaning in a hospital. Two of the Mehalev placement companies (Agens in Hadera and Amin in Jerusalem) have sent women to a cleaning contractor in the hospital of Tel Hashomer. The journey to work begins at five a.m., and they are home again at four p.m. The women, some of whom have small children, are away for 11 hours per day, during which they spend 6.5 hours actually working and earning. For each of them the contractor receives 25 NIS (about $6) per hour of work. He pays each the minimum wage of 19 shekels per hour. The Mehalev companies cover the workers' transportation, using a budget provided by the government under the title "Labor Support Services."
But now let us look at other workers of the same contractor in the same hospital—workers who are not part of Mehalev. They work 30 days per month for 11 hours per day and receive for this 3000 NIS. That is, they earn 9 NIS per hour, less than half the legal minimum.
The budget for Labor Support Services also helps the Mehalev placement companies to finance child care for some of the women. What the companies and the government fail to tell the public is this: The subsidy celebration can only go on a few months. When it is over, if the women want to keep working for the same contractor, they will have to make do with 9 NIS per hour—or they can complain about the illegal wage and return to income maintenance. Either way, they will again find themselves going round and round in the circle of poverty.
Textiles in Caesarea. How did Agens, a Mehalev placement company, manage to persuade a textile plant in Caesarea to employ women from the Triangle? It finances their transportation. It also provided their services free of charge for a month by continuing to pay them benefits, calling it a month of "training" (in fact all the women had worked for 15-20 years in the profession). Some of them complained to Agens about exploitation and callousness at the plant; Agens answered that if they didn't like it, they could go clean the hospital at Tel Hashomer.
A packing house in the north. This plant preferred to receive women from Agam, the Mehalev firm in Nazareth, because their transportation was subsidized. The same plant refused to accept women organized by WAC, because we demanded the minimum wage plus transportation, as the law requires. The plant saved money and Agam earned lots of bucks.
Conclusion. The temporary subsidies granted by the government to the Mehalev companies—at the taxpayers' expense—have created the illusion of a successful program. This illusion serves to obscure the cooperation taking place among all factors except the workers: the state, the Mehalev companies, the actual enterprises where the labor is done, and the contractors. The state also subsidizes the Mehalev companies, which earn on every worker they place. It has an interest in promoting the illusion of success, for it wants to expand Mehalev. In this way it can hasten the privatization of the Employment Service while cutting the number of people eligible for income maintenance.
Mehalev is not the appropriate answer to unemployment in this country. The answer is job creation. There will be no choice for the state but to stop importing migrant workers, reduce the reliance on manpower companies, and invest in infrastructure. Every other solution, cheap and fast though it be, threatens to deepen social gaps beyond what the workers can or will endure.