Wednesday, April 28, 2010

What Israel Needs is MORE Unemployment

Amid reports of political turmoil, trying to jumpstart the peace process, and the widening scope of growing corruption, an important news item was largely overlooked this week. Buried at the end of an article about the Israeli economy, I found a bit of good news. But had it been any more under reported, one could have blinked and missed it. “There were 197,600 unemployed people in March, down 0.5% from 198,500 in February. The unemployment rate in February remained steady at a preliminary 7.3% of the civilian labor force, after gradually declining since May last year when unemployment reached a high of 7.9%, ...” On the surface, this is very nice. It is a credit to the Prime Minister and Finance Minister, the Governor of the Bank of Israel, and I am sure others who deserve credit, and yet more who’d like to take credit. Best of all is that there are more people working, taking home a salary, paying taxes, and investing in the economy. By all measures that’s a good thing. However, I was puzzled as to why this was so under reported. Perhaps, though I am no economist, it’s because what Israel really needs in the long term is MORE unemployment. I am looking forward to thousands of Israelis losing their jobs. Outrageous? Crazy? Treasonous? Not really. Allow me to explain. In the early part of the previous decade, when Israel was subject to an unparalleled terrorist war, Israel’s economy suffered, as did its people. As a response to the trend of bus bombings, cafes turning into blood baths, malls turned into morgues, and pizzerias into slaughter houses, Israeli society undertook an “investment” that is simply not known in any other place in the world. In order to overcome a sense of fear, and instill a sense of security, the Israeli economy created tens of thousands of new jobs in one of the least glamorous but most important areas possible – security guards. Of course, Israel always had increased security at government offices, airports, military facilities and the like. But what changed then is something people living outside Israel cannot comprehend. Think about it. In most places in Israel, a person going about his or her day to day life will encounter multiple security personnel. These people first have to eyeball and profile a person coming their way, ask or assess if they have any weapons, wand them and check their bags, and only then let them enter. But where are they entering? A maximum security facility? The Knesset? A government building? An airport or major train station? No. Average Israelis find these security checks in the most mundane of places. For instance, in the course of an average week, I went to the mall and was checked going in to the parking lot AND going into the mall itself. Think about an average mall, how many entrances there are to the parking, and the building, and multiply that by full time coverage of one guard per entrance. People living in Atlanta, New Jersey, Toronto, Melbourne or any city in Europe could never comprehend much less tolerate this. On city buses, it’s common to see a young man or woman, armed, riding “shotgun.” They have to keep terrorists off the bus to let passengers arrive safely. I went to the bank. I was checked going in, not to prevent me from stealing money, but to prevent me from bringing in a bomb. I met a friend for coffee. Checked again. I drove to a lunch meeting nearby. I was checked entering the parking lot, and the restaurant. Dinner out? Getting “checked” happens when you go in, not when you want to pay the bill. I met with a hotel manager. At the entrance, “checking your bags” has a whole different meaning. I went to the post office to mail a package. Checked, checked, checked. I even had my car checked driving into the strip mall where I take my dry cleaning. Visiting a patient in the hospital one is checked at the parking lot, and at the entrance to the building. When I drop off my son at his pre-school, I greet the armed guard by name. When I pick up my other children from elementary school, another armed guard. This is not like in inner city American schools where violence and crime are rampant. It is just to keep the bad guys out, and the kids safe. I am reminded of my visits to the Soviet Union in the 80s. The USSR boasted that there was zero unemployment under its enlightened (now extinct) communist system. Of course this was another Soviet lie, but it was true that the government paid countless thousands (perhaps millions) to spy on one another. This Soviet over-employment served to give people work as well as to spy on its own citizens, not to protect the average citizen as we do in Israel. Underscoring the need for MORE unemployment, it’s quite clear that security guards are not Israel’s most glamorous career. Any random sample will find a disproportionate number of new immigrants among them, in what is sometimes a most dangerous job. Some are entirely uneducated. Others are decidedly overeducated. But work is work. Doing away with the need for this security-on-steroids and slashing a whole industry of security guards will do a great deal for the economy. Israelis will no longer have to absorb the cost of these guards as an expense passed along in virtually every service industry imaginable. The government and Israel’s free market economy will be challenged to create new industries to integrate the newly unemployed. It will require training and lots of work, but better that we should have a little growing pain in a country that no longer needs the “security” tens of thousands of guards, who can rather devote their efforts to building and contributing to the economy, instead of “just” keeping Israelis feeling safe enough to spend 12 shekels on a cup of coffee, taking their kids so school, or an outing to the mall. Israel has faced and overcome many challenges in its 62 years. Integrating tens of thousands of unemployed will be relatively small, but a challenge indeed. Yet for Israel to prosper to its fullest capability, doing away with the security guard industry will be a great achievement. Unfortunately, this depends largely on external factors over which Israel has little control. May Israel reach a point in my lifetime when security guards can turn their wands into plowshares, and where Israel’s most precious resource – its people – are able to contribute to the country and economy productively, rather than defensively.