Sever Plocker

Israel shuns Wisconsin Plan

It worked in US, but Wisconsin Plan is doomed for failure here

Ten years ago the US entered an era of welfare policy, when President Bill Clinton signed a series of revolutionary laws - The 1996 Personal Responsibility and Work Opportunity Reconciliation Act, also known as the 1996 Welfare Reform Act.


The Act is described by the US government as "a comprehensive bipartisan welfare reform plan that will dramatically change the nation's welfare system into one that requires work in exchange for time-limited assistance."


The left-leaning Clinton adopted the principles of the welfare plan that was initially enforced in the state of Wisconsin, conditioning provision of state aid on work.


The result of Clinton's "welfare reform" surpassed all expectations. En masse, the poor abandoned welfare handouts and joined the workforce. Some 70 percent found employment and real income rose by 25 percent. Thus, 4.2 percent of women and children in the US were saved from poverty.


The US administration, on its part, increased financial assistance to working families earning a low income.


Israel boards Wisconsin bandwagon

The Wisconsin Plan was adopted by several countries in one form or another, all successfully. Israel also decided to adopt the new initiative a la Wisconsin-Clinton.


The Israeli version of the Wisconsin Plan was passed in the Knesset in 2004 as part of the Economic Arrangements Bill. Its declared objective was to allow those receiving National Insurance Institute payments – and able to work – to join productive employment environments.


Initially, the plan was launched for a trial period of one year. Special employment centers nationwide were opened via job placement agencies comprising four local and international business partnerships. The centers opened their doors in August of last year, and they were immediately attacked with fire and brimstone.


This was to be expected: The plan was met with suspicion and hostility during the first year throughout the countries in which it was enforced. It wasn't easy for those who had became accustomed (against their will) to being unemployed for years to suddenly enter the workforce.


However, as time went by, criticism subsided and achievements were highlighted, and the formerly unemployed population began to discover the personal, social and economic advantages of work.


Some 20,000 persons were referred to the employment centers. Some 7,000 joined the workforce either in full or part time positions. Some 2,500 joined community services, and the few thousands who refused to turn up at the centers or to take up the jobs offered were stripped of their rights for income support.


End of the experimental phase

At the end of the one-year trial period it became clearly evident that changes to the plan would need to be implemented. Namely, reducing the load on employment consultants, increasing the public budget for professional training, and facilitating access to the appeal committees.


In addition, the method of communication between the State and the companies operating the employment centers needed to be revised so that they would be remunerated according to their success in job placement and not according to the number of persons who were stripped of their eligibility for government allowances.


In practice, however, something very different happened. The new Minister of Industry, Trade, and Labor Eli Yishai, decided to partially remove from the plan persons for whom it was primarily created: The chronically unemployed, single parents of young children, the elderly, and the handicapped.


Within this framework the plan was made void of its basic principle, whereby every person who is able to work should do so.


Wisconsin Plan's demise in Israel? 

Currently, the business companies in charge of administering the plan, and particularly the foreign ones, are considering cancelling their contracts with the government. Government employment agencies are naturally eager to replace them. If this indeed happens, it will bring about the demise of the Wisconsin Plan in Israel.


Israel has a particularly low percentage of adult citizens in its workforce. The Clinton Reform could have fitted like a glove. But apparently, what's good for the US, Britain and Holland is doomed to fail in Israel, where politics and bureaucracy are far more powerful than any national interest.


פרסום ראשון: 10.04.06, 12:52
 new comment
This will delete your current comment