Snap Judgment: The French lesson

Israeli social lobbies should work with government to create jobs rather than increase the public dole.

By
April 6, 2006 17:24
Snap Judgment: The French lesson

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As scenes of vandalism and violence in central Paris flicker across television screens abroad and major newspapers speak of riots and anarchy in France, people here are grumbling that the media coverage of three weeks of mass protests against a labor law - especially in the English-language press - has unjustly distorted France's image... "Some foreign columnists amplify and exaggerate the situation in France, just as they did during the unrest in the suburbs," she [Defense Minister Mich le Alliot-Marie] said." - International Herald Tribune, March 30th Well, as we say in Israel, been there, done that. Given the French media coverage of this country over the years, the temptation might be to feel, if you parlez-vous my using a German expression, a little of the old schadenfreude. But before we fall into that temptation, it is worth noting that the current unrest in France provides a cautionary tale for this country that in some ways is as relevant as that nation's earlier troubles with its Islamic population. The issue driving France's young population into the streets is a new labor law that will make it easier for businesses to fire employees younger than 26. The reason behind the change is the shockingly high unemployment in this sector, which at 22.2 percent is more than double the national jobless rate of 9.6%. Passage of the law will likely help encourage employers who are now wary of hiring young, inexperienced workers, given current restrictions protecting them from dismissal. Despite this, French students have taken to the streets to protest a change that will help many of them find work. Why? One reason is surely a Gallic entitlement culture that has allowed France's social safety net to develop to a point that it actually discourages people from seeking gainful employment. What's more, a system so focused on protecting old jobs rather than helping create new ones - as evidenced by France's anemic economic growth rate - means that such relatively new sectors as the immigrant Muslim population have found it far more dfficult to enter the work force. THUS IT is that economic policies designed to alleviate social ills actually serve to aggravate them. And that's a French lesson worth remembering in light of the gains made in last week's elections by the so-called "social bloc" that Labor leader Amir Peretz is now trying to form together with Shas and the Pensioners' Party, as they enter negotiations to join a Kadima-led government. It is undeniable that some necessary budget cutting done by the previous government during a time of severe recession led to serious hardships for the weaker sections of the population in need of public assistance. Nor would many dispute the fact that a small minority in the highest tiers of the Israeli economy exerts an excessive influence on government policy to help perpetuate their advantageous position at the expense of the rest of us. The question then is how to correct social inequality and maintain an acceptable welfare safety-net in a way that still allows for economic growth and job creation, rather than perpetuate a "culture of poverty" in which policies actually discourage people from going out to do a days' work. This is an especially urgent issue in today's internationally-competitive globalized economy in which nations no longer have the luxury of simply using protectionist tactics to just maintain employment and growth rates at present levels. UNFORTUNATELY, those political parties that claim to champion the rights of the Israeli working class have yet to prove they fully understand the distinction between populist cant designed to win votes, and policies that will genuinely provide long-time relief for their constituencies. Peretz, for example, has certainly taken some legitimate stands during his campaign, such as pledging to raise the minimum wage. Whether it needs to go immediately as high as the shekel equivalent of $1000 a month is debatable, but periodic minimum-wage increases are an accepted feature of any mature Western economy. However, so is privatization of government-owned industries, a policy Peretz fought strongly against as Histadrut leader in a misguided effort to protect the unfair benefits enjoyed by employees of public-sector protected businesses which hold a virtual monopoly in their sectors (such as the Electric Company, with its grossly inflated salaries). Rather than simply take a knee-jerk negative attitude toward privatization, the Labor leader should use his new-found influence to make sure these former government-controlled companies are taken public in a way that keeps their markets competitive and encourages job creation - rather than their simply becoming privately-owned monopolies in the hands of the same politically-connected operators who already control too much of the local economy. Similarly, the Pensioners' Party scored some real points on the way to winning a surprising seven seats in the elections, especially the need to protect retiree benefits that had already been promised to several generations of hard-working Israelis. But the party should rethink its opposition to the raising of the retirement age enacted by previous governments. Again, this is a common-sense step many Western economies have taken in recent years as improvements in longevity and health care have made for a far larger and more fit population over 65. Surely, thoug,h the most problematic of the "social affairs" parties is Shas, which only began stressing these issues in the past year. "God must love the poor, he made so many of them," said Abraham Lincoln, and Shas sometimes seems to love them so much it wants to make even more of them. One way to surely do that would be for the next government to accede to the party's demand to reinstate child allowances in a way that actually encourages indigent families to have more children in the expectation of increased benefits. Acting Prime Minister Ehud Olmert has acknowledged that the budget of the next government should do more to help the weakest sectors of Israeli society. The social-issues lobby must now work with him to do this in a constructive way that creates new jobs rather than just increases the public dole. Those who can't work, such as the severally handicapped or the elderly, must be taken proper care of; but those who won't work must understand there is no free lunch, even in a government that includes Labor, Shas and the Pensioners. After all, the last thing we want is for people to think that things have gotten as bad here in Israel as they are in… France. N'est-ce pas? The writer is director of The Israel Project's Jerusalem Media Resource Center. www.theisraelproject.org

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