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From Welfare to Nowhere

In August 2005, steps were taken to implement the Wisconsin Plan in Israel – known here as Mehalev: “From the Heart.” Applied in the American state of Wisconsin in the 1990’s, it signals a new phase in the privatization of social services.

During its two-year pilot stage, Mehalev includes 17,800 of the 160,000 who receive income maintenance. The plan is being tried in four centers: East and West Jerusalem; Nazareth and Nazareth Ilit; Hadera and the villages of Wadi Ara; Ashkelon and Sderot. The program is run by four companies, each combining an Israeli firm with a foreign one that has already “done Wisconsin” in its own land.

The crux of the program is this: every participating welfare recipient will be required to remain in the Wisconsin center between 30 and 40 hours per week, receiving counseling, training and job referrals. If he does not succeed in finding salaried employment, the counselor may assign him to full-time non-paid work in a community institution such as a hospital or charity. Only by obeying will he continue to receive a welfare check (a maximum of NIS 2200 per family = $488 monthly).

The people who have been referred to the Wisconsin centers include a high proportion of the sick and disabled, as well as many who have never worked outside the home. Among the latter are Arab women, only 17% of whom are employed (compared with 50% of Jewish women). The reason is not only a lack of jobs, but also Arab society’s disapproval of working wives. Now, with Wisconsin, even the older Arab women will be compelled to appear in the placement centers for 30-40 hours a week. It is unlikely that the economy will have jobs for them, except unpaid work in hospitals and public institutions. “Our worry,” says author Asma Agbarieh, “is that entire families in which the father is really unable to work ... will lose what little is left in welfare benefits.” For more background, see “Punishing the Poor” by Assaf Adiv, Challenge 93.


ETWEEN JULY 2005 and January 2006, 5053 Israeli citizens disappeared from the list of income-support recipients maintained by the National Insurance Institute (NII). This statistic appears in NII’s interim report (May 28, 2006) on the Mehalev (aka Wisconsin) Program. When social organizations attempted to discover what had happened to the “vanished” people, they received this official response: “The matter is still being checked. You will be updated when the two years of the pilot project terminate.”

The 5053 absent names represent, says the report, a 28% drop in the rate of those receiving income support. Did Mehalev manage to place them in jobs, thus fulfilling its stated aim? Here the picture is obscure.

The NII Report also says that the four private companies responsible for Mehalev reported 8195 job placements for 6264 participants. The Finance Ministry sees this as proof that this private program beats out the government employment service. But is it so? A closer look reveals another story.

“Placement” is no synonym for “job,” as the writers of the NII Report note: “The data do not include information on the substance of the placement, such as, for example, whether the placement went into effect, what is the extent of the work and its accompanying salary, what sort of work is it and how long will it last.” www.btl.gov.il/idchunim/Wisconsin1.htm

For a not atypical example of a Wisconsin placement, consider 43-year-old Zahira M. from the Arab village of Ar’ara. She was sent to a cleaning job at Tel Hashomer Hospital. The time of her departure to work was set for 05:30. Agens, the company that implements Wisconsin in Hadera, disregarded the program’s rules, according to which it must find a suitable arrangement for Zahira’s young daughter. Zahira arrived at the hospital with her daughter and was rejected. Yet, in the data provided by Agens to NII, Zahira appeared as “placed” in a job. For this Agens will receive a bonus. Now it threatens to register Zahira as a job-refuser. This will cause her to disappear for two months from NII’s list of beneficiaries, saving the state her income maintenance. Agens will get a portion of this saving as well. Two birds with one stone.

Because lack of transparency on the part of the companies keeps us from penetrating to the real significance of the figure they give for job placements, we are forced to make do with the single indicator that we do have: 28% have dropped from the list of those receiving income-support. According to the same NII report, a third of them lost the support outright, another third shifted to disability or old-age support, and a final third (fewer than 1700) are registered as having been sent to work.

We don’t want to be picky, so we shall also relate to the rosier figures that are published on the Mehalev website.* There the program’s manager, Dorit Novak, claims that placement has succeeded for 3337 people (from among the 6264 mentioned above). The data relate to the first nine months of the program (August 2005 - April 2006). Note that even if this figure is correct, it concerns only 19% of the 17,800 people participating in the pilot project. On an average, then, each of the four centers placed 93 participants per month.

Was it for such miniscule gains that we had to mobilize international forces? Are these the results the state had in mind when it budgeted 68 million shekels (ca. $16 million) to each of the four companies? Just for comparison, last March alone, the Workers Advice Center (WAC-MAAN) found jobs for 65 construction and farm workers without requiring a penny from the state.

The opacity about the rate of job placement, compared to the clarity about the shrinkage of the welfare rolls, shows what the state really wants: not aid to the unemployed but a reduction in the number it supports.

With this in mind, a recent decision in the Labor Court is worth noting. On June 15, Justice Eyal Avrahami determined that the companies implementing the project are caught in a “structural conflict of interest.” Their profit depends directly on cutting the amount of income maintenance that the government has to pay. Where the state is concerned, no distinction is drawn between a benefit that is erased because of a successful job placement and one that is erased because a person has been classified as a refuser.

Justice Avrahami points out the need for a closer look at cases where a person appeals against classification as a refuser, because the private corporation, which is authorized to make the classification, has an economic interest in doing so. This judicial decision is a precedent with regard to legal supervision over the Wisconsin project in Israel.

Not here, not now

Whatever success the Wisconsin Plan may have had in America, in Israel it is a flop. This should surprise no one. The American economy was growing in the 1990’s and there was need for manual labor. In the Israel of 2006, however, the economy is fractured, the labor market broken. There are no forces at hand that can bring about the massive creation of jobs on which the success of Wisconsin depends.

A report of the Israel Democracy Institute, published on June 11, states that Israel leads the Western nations in poverty. About a fifth of the population (one of five families, one of three children) lives below the poverty line – that is, on less than half the median income. Most are Arabs, ultra orthodox Jews, and the elderly. The report connects poverty to unemployment, low salaries and a lack of investment in local infrastructure. Salaries in particular have declined because of a sharp reduction in the power of organized labor. (See article in this issue, p. 16.)

Privatization is the order of the day. Let those who can, swim. Let those who can’t, sink. The last thing on the government’s mind is to retrain citizens toward a modern high-tech economy. They are condemned to remain in unskilled jobs, earning the minimum wage or less. Often the pay is wholly or partly “under the table,” with few or no social benefits. The prospect of such a job is no great incentive: it will not save a family from poverty.

Moreover, Israel’s economy is heavily “black market.” This fact operates against its workers – and even more against its unemployed. Uncertainty is their only certainty. Over and over one hears the same wage: 19 shekels an hour (ca. $4.30). An economy burgeoning with illegal, unorganized labor has no space for applicants sent through Wisconsin.

Partners in the quest for justice

There is rising criticism against Mehalev from social organizations as well as political parties. Among the latter are Hadash and Balad on the left, Yisrael Beitenu on the right, and the ultra orthodox Shas (whose leader, Eli Yishai, heads the Ministry of Industry and Commerce that supervises the program). This criticism is likely to weaken the prospect for the program’s expansion, at least until the end of the two-year pilot period.

Wisconsin may be viewed as an attempt by the state to evade responsibility for the weaker strata. In Israel, the resulting vacuum has sucked in a variety of social organizations. These do much to defend the jobless on the legal and public levels. Generally speaking, each organization operates independently within a different geographical region. Yet common suffering unites the unemployed. An interesting dynamic is underway. Poverty is becoming the sticking point, joining the different sectors. In order to check the new solidarity, WAC sent me to meet some of those who are working, as we do, at the grass-roots level.

Returning responsibility to the state

Commitment to Peace and Social Justice (Mechuyavut in Hebrew) was established in 1998 with the aim of combining the search for peace and social justice.

Toward the end of May, I interviewed Gili Re’i, Commitment’s General Secretary, in her Jerusalem office. She said: “The purpose of the [Wisconsin] program is clearly to drive people to despair and deny them benefits. One problem is the privatization of authority. They’ve allowed private companies to decide who is to lose benefits and who not. A second problem is the very fact that they’ve placed conditions on the right to live in dignity, which is a basic right. In this specific instance, they’ve conditioned this right on the participant’s agreement to a personal program designed by the companies. The essential problem is that the companies have an incentive to deny benefits: they get paid for this, although it costs them no time or effort. The amount they receive after going to the trouble of placing someone is not much greater. There’s a clear conflict of interest.”

Commitment has collected testimonies on the humiliations and threats endured by the participants – Jews and Arabs – many of whom haven't the slightest chance of entering the job market. Re'i sees the solution in a "change in the face of the labor market," a phased process that will have to take place under the government's responsibility. It must include the following steps: enforcement of labor rights; significant investment in infrastructures; incentives to keep companies from moving their plants abroad or importing migrant labor; steps against discrimination on the basis of age or ethnicity; enforcement of the law providing day care for the children of single-parent families; and investment in programs that increase the employment potential of people who have long been out of the labor market, with emphasis on training.

Melting pot in Hadera

Rabbi Idit Lev coordinates the department for economic and social justice in Rabbis for Human Rights (RHR). It was founded in 1988, during the first Intifada, “in order,” she says, “to express the other Jewish voice, not that of the settler.” The organization provides aid to the Palestinians of the Occupied Territories, sends volunteers as human shields to protect them, and – within Israel’s borders – educates for Judaism and human rights. From this to the Wisconsin plan, the way was short. RHR is active in the Hadera region.

Lev: “The one good thing in the social disaster called Wisconsin is that in some senses it hurts everyone equally: Ethiopian and Mizrahi Jews [Jews from Arab countries – Ed.], Jewish pensioners and Arabs. It’s no easy thing to bring all these groups into a single room. Oppressed social classes generally tend to be hostile toward one another. But if we manage to persuade them that the war belongs to everyone equally, the result may be a big social change.”

Among the Wisconsin participants, for example, are Mizrahi women over fifty who have never left theirs homes to work, as well as Arab women over fifty in the same situation. “These two sectors share the same tradition,” says Lev. “They are people who don’t speak the language and don’t have any acquaintance with the local [i.e. Israeli] culture. The racist labor market does not want to accept them. The state paid these women a benefit for years on end, but now it’s decided to stop this and send them to work, without any consideration for their culture. More than once it’s happened, for instance, that the company sent the woman to work before it sent her husband. In protest, the husband quit the program along with his wife.”

Says Lev: "I agree with the mantra of Dorit Novak, the head of Mehalev, that "all labor dignifies those who perform it," but the fact remains that not everyone can work, not in cleaning, for instance. Most of the participants are ill or disabled people who aren't up to coping with the system and proving the degree of their disability, since they can't afford lawyers."

Lev leads a trend to unite "all of the weak who are getting screwed in the same way and who don't grasp that the tactic is 'divide and conquer'." The task isn't easy. "The Arabs have their courses in Baqa al-Gharbiyyah and the Jews in Hadera, with the Ethiopians separated from the Russians. The Arab speaks no Hebrew and gets a counselor who doesn't speak Arabic. But he doesn't know that the Russian who doesn't speak Hebrew is suffering from the same problem. Each thinks that the system is aimed at him alone."

Refugee Camp in Ashkelon

In the Ashkelon region I met Ronit Shimoni (46), coordinator of Human Response, and Michael Peleg (59). Both are clients in the Wisconsin program there.

Shimoni fills out appeals for the unemployed, all of whom in this region are Jewish: Mizrahis, Russians and Ethiopians. As a “reward” for her activity, she loses her benefit on an almost monthly basis. Recently, because of this loss, she was thrown out of her apartment for failing to pay the rent. On May Day she led the Wisconsin clients out of their classrooms to demonstrate. For this she was arrested and lost her benefits for a month.

Shimoni and Peleg entered Mehalev with high expectations that quickly burst. In job-scarce Ashkelon they found no work. But they underwent a personal change. Shimoni says that the program managed to bring things out of her that she didn’t know she had: “I see many illiterate people, who haven’t made any progress in years – the labor market has given up on them. I see Ethiopians, for instance, who are ashamed to claim what is rightly theirs. To me this is a war for justice.”

Shimoni attempts to explain why people don’t revolt against the program: “It’s like in a refugee camp. Why do people keep quiet there? Don’t they have souls? They’re locked up in the place. I’ve been in a refugee camp, and I’ve seen how people close up into themselves. It made me ill to see it. That’s what they’ve done to us. They’ve put us in a space and said ‘You’ve got to live here according to our rules, enclosed in this circle. You’re not allowed to leave. You have to fulfill our orders. If we send you to service work, you must go.’ We’re like a prisoner who has to repay the community for his crime. Our crime was that we received welfare. How did Bibi [former Finance Minister Binyamin Netanyahu] put it: ‘We’ll eliminate poverty within three years.’ It’s not poverty that’s being eliminated. It’s the poor.”

Mehalev today stands at a crossroads. Expanding it will bring on social catastrophe. It is not too late to retreat from this adventure, just as the Education Ministry, under new management, is retreating from the Dovrat Plan. (See Challenge 87.) Reform is necessary, without a doubt, but reform must make a clear distinction between those who need welfare benefits and those who are able to work. A true support system respects the dignity of human beings and doesn’t relate to them as swindlers. Privatization of the employment and welfare system does not create a good society. It merely perpetuates poverty, depositing sediments of alienation and anger that will one day explode against society as a whole.

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