Jobs through growth

Since Netanyahu became finance minister in 2003, more than 200,000 jobless returned to work.

ethiopian workers 88 (photo credit: )
ethiopian workers 88
(photo credit: )
The Central Bureau of Statistics yesterday reported a significant drop in the jobless rate for 2005. Besides being good news in itself, this represents additional confirmation that much of the economic policy and its attendant belt-tightening of the past few years - often maligned during the current campaign season, especially by some Kadima and Labor candidates - has actually worked. Less joblessness is one of the incontrovertible benefits of economic growth achieved by the imposition of tough and unpopular measures. Unemployment declined to 9 percent by the end of 2005, in contrast to 10.4% for 2004. Among men the jobless rate fell from 9.5% in 2004 to 8.5% in 2005, while among women it decreased from 11.4% to 9.5%. The above figures encompass not only those registered in government Employment Service bureaus, but also the long-term jobless, who no longer frequent the bureaus or who seek employment privately. Additionally, full-time employment (35 hours weekly and more) rose by 3.5% last year. Part-time work increased by 4.3%. At the same time the numbers of involuntary part-timers - those unable to find full-time employment - dropped from 142,000 in 2004 to 139,000 in 2005. There is always room for improvement. Joblessness is far from the only ailment afflicting an economy rife with inequalities and a society grappling with real poverty. Still, in every category of the unemployment statistics the movement is clearly in the right direction. Altogether, since Binyamin Netanyahu became finance minister in 2003, more than 200,000 jobless returned to work. Labor may be right to ascribe part of the success to more stringent criteria for unemployment and welfare claims, which has caused real pain in some of the most affected sectors and which forced many of the chronically unemployed back to the job cycle. But that latter consequence is hardly negative. Getting people back to work is a praiseworthy achievement, even if partially accomplished by making subsistence on the dole less of a viable alternative. If anything, it indicates that aspects of the previous welfare policy were counterproductive. Against this background, we could do with a little less election-time populist ardor and promises of government largesse at the expense of our collective economic future. It would be a shame if gains accumulated so painfully since 2003 were squandered. The unfortunate yet consistent phenomenon in our economic chronicles is a considerable downturn after each electoral round, because of sudden election-eve squandering of financial resources. This Knesset race is being run with no new budget approved for 2006. Much of what is promised cannot be implemented until the new budget is passed. Nevertheless, expensive declarations of intent abound - from increasing the budget for new medications, to hiking teachers' pay and raising budget allocations for research and development, science and technology initiatives and higher education. All are laudable causes. The hitch is making sure there are cash reserves to underpin them. Demagogic recklessness risks throwing out the baby with the bathwater. And the temptations are numerous. The independent Taub Center for Social Research, for instance, published a separate set of findings yesterday, which point to widespread pessimism and insecurity when it comes to social welfare. As many as 20% of the populace, according to the center's survey, fear a descent into poverty. As many as 31% say they are not making a living. Among the elderly, 40% consider their income insufficient, as do 52% of Israeli Arabs and 48% of those with very little formal education. Such perceptions constitute a clear encouragement to candidates to woo support with promises of better treatment ahead. But while the lure to accrue quick political capital may be hard to resist, shortsighted spendthrift commitments must be eschewed. Voters would do well to weigh parties on the basis of concrete proposals for increasing economic growth, rather than for promises to spend money the economy has yet to generate. It is painful truth that the further our economy advances, the greater the risk that less skilled laborers will be left behind. We must do our best to ease the transition, and the most widely beneficial route is to encourage an economy bursting with new job opportunities. This can be done by increasing the mobility of labor, reducing taxes and pressing ahead with privatization, deregulation and measures to increase competition. Every political party that has aspirations to govern - and to seriously address the real issues of poverty and economic inequalities - should be advancing proposals along these lines.