In Early August 2005, steps were taken to implement the Wisconsin Plan in Israel – known here as Me-ha-Lev: “From the Heart.” Applied in the American state of Wisconsin in the mid 1990’s, it signals a new stage in the privatization of social services, with the aim of eliminating the welfare state. The proportion of Israelis receiving welfare (AKA “income maintenance”) is indeed way out of line in comparison with most Western countries. If there were jobs, it would certainly make sense to help them shift to “workfare.” The problem is that there are no jobs. In the Israeli version, the Wisconsin mechanism is set up to strike thousands of people from the caseload without assuring them of employment. The implicit goal is to reduce expenditures by punishing the poor.
Israel’s annual Poverty Report, published on August 9, puts it first among western countries in poverty among children. After distribution of welfare payments, a third of Israel’s children (714,000) are below the poverty line (half the median income). The western country occupying second place in poor children, with 27%, is the US. Like much of what arrives these days bearing the tag “Made in America,” the Wisconsin Plan will deepen poverty.
With the rise of the second Sharon government, in partnership with the neo-liberal Shinui Party, the conditions were ripe for Wisconsin. The Knesset approved the plan in 2003. It jibed well with the reforms of then Finance Minister Binyamin Netanyahu, which included privatization (of the ports, the pension funds, the major telephone company) and drastic cuts in welfare (for the jobless, the physically challenged, single-parent families, and families with children).
During its initial stage, “From the Heart” includes 17,000 of the 160,000 who receive income maintenance. The plan will proceed on an experimental basis for two years in four centers: East and West Jerusalem; Nazareth and Nazareth Ilit; Hadera and the villages of Wadi Ara; and Ashkelon. Of the participants, 30% will be Arabs and 20% new immigrants.
The program will be run by four companies, each consisting of an Israeli firm and a foreign one that has already “done Wisconsin” in its own land. Altogether Israel has budgeted NIS 80 million ($18 million) for the plan.
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 doing this work will he continue to receive a welfare check (NIS 2200 per family = $488 monthly).
Are the unemployed to blame?
In 1982, when Israel passed legislation providing income maintenance, the number of eligible households was less than 10,000. By 2003, the number had grown 16-fold – to 158,000 households! (Source: Nehemia Strasler, Haaretz July 17, 2003.) What happened in between? The main event was that Israel globalized its economy, canceling protective tariffs, privatizing government corporations, dispensing with labor-intensive industries while promoting hi-tech, and importing migrant workers. These measures created nearly irreversible unemployment but found favor with local and international capital. Welfare payments purchased social calm.