Tuesday, August 2, 2011

Israel's Middle Classes Rise Up

Israel is experiencing a summer of discontent: Tent cities have sprung up in response to rising housing costs; Dairy products have suffered mass boycotts that have turned that industry upside down; doctors & nurses have been involved in industrial action for over 120 days and now parents with strollers have protested the prohibitive costs of child rearing in Israel.
First, lets dispense with that these protests are not: they are not an Israeli 'arab spring'. The Arab Spring demos are about fighting for basic democratic rights. Autocratic arab states have been prepared to kill these people rather than allow them say in the way their country is run. Here in Israel it could not be more different, because Israelis have enjoyed those democratic rights since the founding of the State of Israel. In fact, these demos are a reflection of the vibrancy of our democracy. No, the Summer of Discontent in Israel is about the Middle classes: People who's education and careers would normally lead them to basic financial security, but in Israel they find themselves increasingly unable to move forward with their lives: Wages don't stretch so hard working people find themselves working two jobs and spending even less time with the families they are working to support; house costs in cities where they make their homes are rapidly becoming prohibitive leading to a generation of Middle Classes facing the prospect of never getting a foot on the housing ladder; early child care is so expensive that it is hardly worth both parents going to work, and yet impossible to make ends meet if they do not both have jobs; and the cost of basic utilities keeps rising whilst wages more often than not, stay static. This then is the root of the Summer of Discontent: the middle class of Israel feeling squeezed, overburdened and as a social class, burnt out.
There are many ideas floating around, and I do not pretend to have the economic or political knowledge to say what we should do, but I do know,as a member of this middle class in Israel, that we have to do something soon! Ideas that listeners have suggested include state support for early child care (Mishpachtonim) so that going back to work after maternity leave does not mean a drastic cut in take home pay; reducing the number of flat taxes such as VAT (Ma'am) and increasing means based taxes; less child support emphasis on larger families (aimed at the poorest HAredi & Arab sectors) and more on smaller families; rent control for cities like Jerusalem where the middle classes find themselves priced out of the market by wealthy absentee overseas owners and Haredim moving into areas making them inappropriate for other sectors; Increasing local and purchase taxes for overseas owners as well as incentives for absentee owners to rent or sell to locals.
My fear is the result of all this dissent will be either a 'band aid' over the concerns - some type of appeasing gesture that does not address the genuine pressures on the Israeli Middle Class or it will being the Netanyahu government down which will almost certainly dispel the anger and cause the tent cities to be taken down, but will then lead to business as usual. This is Bibi's fault, but it's also Olmert's Sharon's, Peres's, Rabin Shamir and Begins ! This has been 25 years in the making, but if we don't want to see the growing Middle Class exodus of Israeli's and Anglo Olim then it needs to proper long term policy decisions to be made a sea change in thinking toward Israel's Middle Classes.

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