Monthly Archives: October 2008
Unlike the others, the administrators are not seeking money for themselves. Their claim is that due to repeated budget cuts, they can no longer afford to hire even the adjunct lecturers who have replaced tenured faculty in many departments. Thus without extra funding, they will have to close numerous departments, mainly in the humanities – something they consider unacceptable for a self-respecting university.
Also unlike the others, the administrators have a good case: As Dr. Dan Ben-David notes in his book Brain Drained, the country’s ratio of senior faculty to population is now only half what it was in 1973. In absolute terms, both Hebrew University and Tel Aviv University have fewer senior faculty positions now than they did then (by 14 percent and 21%, respectively); yet the country’s population has more than doubled. And as a percentage of gross domestic product, state-funded university budgets are now 38% lower than they were in 1977.
The result has been something a country whose only natural resource is brainpower cannot afford: a massive brain drain. Fully 25% of Israeli professors work in America, Ben-David says, compared to less than 5% of European professors. And while American universities admittedly offer better pay and higher research budgets, the main reason for this brain drain is that positions are simply unavailable here. Since tenured faculty cannot be fired, universities have instead reduced their staffs through hiring freezes.
YET WHILE increased government funding is clearly part of the necessary solution, the universities are wrong in thinking it can or should be the whole solution.
The blunt fact is that state-funded higher education worldwide is now more expensive than it was 30 years ago. There are various reasons for this, including the soaring costs of cutting-edge scientific research. But perhaps most significantly, the proportion of the population attending college has risen as college degrees have increasingly become prerequisites for good jobs. And since all state-funded systems heavily subsidize tuition, this has created a growing burden on national budgets.
Throughout the Western world, therefore, state-funded universities are being forced to augment their income from nongovernmental sources – namely, private donations and tuition. England and Germany, for instance, both recently raised tuition at state-funded universities; so have many American states (for state schools).
And that is the crux of the current budget standoff here: The Finance Ministry is willing to increase university funding, but has conditioned this on various reforms, of which the most important is a tuition hike.
Since university administrators do not set tuition themselves, this pressure tactic is aimed primarily at the cabinet, which currently opposes raising tuition, and secondarily at student unions, whose lobbying influences the cabinet’s positions. Yet the administrators are not guiltless, either: Instead of recognizing that higher tuition is essential to their schools’ financial future, and therefore pressing the cabinet to support it, they demanded that the government cover the entire shortfall. They thereby reduced pressure on both students and ministers to moderate their positions, while also depriving the Treasury of the academic imprimatur it needs to paint its demand as good for academia rather than merely for the state budget.
Yet the Treasury is right – not only for budgetary reasons, but because artificially low tuition subsidizes the rich at the expense of the poor.
Wealthy students, as burgeoning enrollment at expensive private colleges attests, can afford to pay far more than the current subsidized tuition of NIS 8,600 a year. The popular Interdisciplinary Center in Herzliya, for instance, charges NIS 31,500 a year. And with so much of the higher education budget devoted to subsidizing those who can pay, little money is left to provide financial aid to the truly needy.
Moreover, a university education is one of the best financial investments around. It is the difference between being stuck in a minimum-wage job and landing one that pays the average wage or better. Since the monthly minimum wage is currently about NIS 3,850 and the average wage about NIS 8,200, that difference comes to some NIS 4,350 a month. In other words, it would take exactly two months of work at average rather than minimum wages for a university graduate to recoup his entire year’s tuition. Thus not only could students justifiably be asked to pay more, but the enormous tuition subsidy means that low earners are effectively subsidizing high earners – or, more accurately, the education that makes them high earners – through their taxes.
LAST YEAR, a committee on higher education reform recommended raising tuition to NIS 14,800 (about NIS 1,233 a month). For upper-income families, that is still easily affordable. And it is also still a fabulous investment: Ten months of work at average rather than minimum wages would finance the entire three-year degree.
If all of the country’s 171,000 undergraduates paid that amount, it would increase the higher education budget by some NIS 1.1 billion a year – almost half the extra NIS 2.4 billion the universities say they need, and about one-sixth of the total state budget for higher education. In reality, of course, the increase would be far smaller, since much of the money would have to be funneled into increased financial aid. But it would still augment the universities’ budgets by hundreds of millions of shekels a year, thereby easing their financial woes, while also reducing an unnecessary and unjust state subsidy to the wealthy. And, counterintuitively, it might even assist the universities’ private fund-raising (as next week’s column will explain).
With elections called for February, no serious progress on the university funding crisis is likely now. But for the sake of the future, the next government must give priority to resolving this crisis, through both higher state funding and higher tuition.
Shas wants to restore the system in place from 2000-2003, when the per-child allowance was NIS 171 for the first and second children, NIS 343 for the third, NIS 694 for the fourth and NIS 856 from the fifth onward. This structure primarily benefited haredim and Muslims, the only communities where large families are the norm. And it had two adverse effects.
First, because a family with six children received NIS 3,091 a month in child allotments – roughly equal to the minimum wage at that time – shunning work became financially feasible. Unsurprisingly, therefore, workforce participation rates among haredim and Muslims were more than 25 percentage points lower than among the rest of the population.
Second, the low allotments for earlier children offered no financial incentive for having, say, two children rather than one, but the high allotments for later children did provide an incentive for having, say, seven children instead of six. Thus this structure encouraged demographic growth among non-Zionist haredim and Muslims, while discouraging it among the Zionist majority.
IN 2003, the government slashed all the allotments, intending eventually to equalize them at NIS 144 per child (though this never happened). The cuts had two main goals: saving money and encouraging haredim and Arabs to work. But no serious thought was given to using the allotments to influence demographics, as the popular wisdom held that allotments did not affect birthrates.
Since then, however, hard evidence has refuted this popular wisdom. In the two years following the cuts, the Muslim fertility rate plunged from 4.5 to four children per woman, then leveled off (it was 3.9 in 2007). Among the Beduin, the rate fell even faster, from nine children per woman in 2003 to 7.6 in 2005. Fertility rates also plummeted in haredi towns (the only available indicator, as the Central Bureau of Statistics does not report the overall haredi birthrate): In Betar Illit, for instance, it dropped from 8.9 children per woman in 2001 to 7.7 in 2006, while in Modi’in Illit, it fell from nine to eight during this period.
Moreover, a new study published last year by the US-based National Bureau of Economic Research on how child allotments affected Israeli birthrates between 1999 (just before the massive increase in 2000) and 2005, found that not only did cutting allotments lower birthrates, but increasing them raised birthrates.
UNSURPRISINGLY, THIS was primarily true for poor families: Among wealthy families, for whom child allotments constitute a minor share of total income, the effect was negligible. Fluctuating allotments therefore had the greatest impact on haredim and Muslims, the country’s two poorest sectors. Nevertheless, the impact was also significant among non-haredi Jews. Hence if properly targeted, higher child allotments could substantially improve Israel’s demographic balance.
The overall Jewish fertility rate was 2.8 children per woman in 2007, meaning that 65 percent of Jewish families have only one or two children. Thus providing financial incentives for families with one or two children to have a second or third could significantly increase the Jewish birthrate. Shas’ system, however, encourages parents with four or more children to have another child. And since only 15% of Jewish families fall into this category, its impact on the Jewish birthrate would be marginal.
In contrast, 39% of Arab families have four or more children, while only 38% have one or two. Thus structuring the allotments to encourage parents with one or two children to have another would increase the Jewish birthrate far more than the Arab one – whereas Shas’ formula, by encouraging families with four or more children to have another, would increase the Arab birthrate far more than the Jewish one.
Clearly, financial incentives would only persuade couples to have another child if they wanted one. But a major survey commissioned by the Jewish Agency in 2005 found that the average secular Jewish couple would like three children, while the average traditional couple would like three or four (religious couples wanted larger families). Thus in this case, higher allotments probably would produce higher Jewish birthrates.
IS IT acceptable to structure child allotments to influence the demographic balance? For anyone who wants this to remain a Jewish state, the answer must be yes. In 2007, Jews constituted 76% of the population – down from 80% in 1997, 82% in 1987, 84% in 1977, 86% in 1967 and 89% in 1957. In other words, despite massive Jewish immigration, the Jewish majority is being steadily eroded by the higher Arab birthrate. And that trend is liable to continue unless the Jewish birthrate is increased.
But what of Shas’ claim that higher per-child allotments for large families are necessary to reduce poverty? That, it turns out, is simply false. According to the Bank of Israel’s latest annual report, the haredi poverty rate averaged 52% in 2001-3, when Shas’ formula was in effect, compared to only 44% in 1997-2000. In other words, by encouraging higher birthrates and lower workforce participation, the higher allotments actually increased haredi poverty. Moreover, after initially rising when the allotments were slashed, the haredi poverty rate fell from 64% in 2005 to 59% in 2006/7, as haredim began adjusting by having fewer children and getting jobs.
DEMOGRAPHICS ARE ostensibly Kadima’s raison d’etre: Unlike parties to its left, which advocate leaving the territories to achieve peace, Kadima advocates doing so to secure Israel’s Jewish majority. But quitting the territories would do nothing to solve the demographic problem inside Israel. Thus Kadima ought to be the first to insist on restructuring child allotments to address this problem.
Instead, it has reportedly accepted Shas’s formula for distributing the money; it is merely haggling over the amount. And it has thereby opted to worsen the demographic balance rather than improve it.
Take, for instance, its pledge that “the United States will lead efforts, working together with Jordan, Egypt and others in the international community, to… prevent the areas from which Israel has withdrawn from posing a threat that would have to be addressed by any other means.”
In reality, Palestinians have fired more than 6,000 rockets and mortar shells from Gaza since the August 2005 disengagement, more than triple the pre-pullout volume. The Palestinian Authority, which controlled Gaza until Hamas’s June 2007 coup, made no effort to prevent this. Yet far from “leading the effort” against this threat, Secretary of State Condoleezza Rice preferred to press Israel for more concessions, claiming that absent these, the PA could not be expected to fight terror.
Specifically, she demanded a “safe passage” between Gaza and the West Bank – which would have enabled rocket technology to spread to the latter – and the reopening of the Israel-Gaza border, which would have eased terrorist procurement and infiltration. In November 2005, she bullied Sharon into signing an agreement that included both provisions, but Olmert, to his credit, froze it because of the ongoing rocket fire. Nevertheless, she continued pressing these demands, most recently in her May 2007 “benchmarks” plan.
THE LETTER also pledged that “Israel will retain its right to defend itself against terrorism, including to take actions against terrorist organizations,” if Gaza did prove “a threat that would have to be addressed by any other means” than diplomatic pressure. In reality, Washington pressed Olmert to avoid anything beyond ineffective, small-scale military operations. But there, it was pushing against an open door: Olmert wanted a major operation as little as Bush did.
Thus in theory, Bush’s letter offered a multilayered security guarantee: Either the PA would provide security voluntarily, or the U.S. would “lead the effort” to force it to do so, or if all else failed, Israel would protect itself militarily. Instead, Palestinians launched daily attacks from Gaza without suffering any serious diplomatic or military consequences. And the world will now expect Israel to accept this as the model for future withdrawals as well.
Equally grave, however, is the evisceration of two key diplomatic achievements. One was the letter’s pledge that the refugee issue must be resolved “through the establishment of a Palestinian state, and the settling of Palestinian refugees there, rather than in Israel.” The US has not reiterated this with the consistency and clarity necessary to convince the Palestinians that it is serious. But at least it never officially backtracked.
Olmert, however, single-handedly gutted this achievement by offering to absorb some 20,000 Palestinian refugees under any deal. And as everyone knows, the minute you concede the principle, the price is negotiable.
Predictably, therefore, the world is already pressuring Israel to raise the figure. French Foreign Minister Bernard Kouchner, for instance, declared earlier this month that not only must Tzipi Livni honor Olmert’s offer, she might even have to increase it: “I don’t know how many [refugees Israel must accept] – 10,000 or 100,000, I don’t know,” he said.
The second achievement was the letter’s promise that “in light of new realities on the ground, including already existing major population centers, it is unrealistic to expect that the outcome of final status negotiations will be a full and complete return to the armistice lines of 1949.”
THE BUSH administration began gutting this promise almost immediately, by objecting vociferously to Israeli construction in these “major population centers.” Clearly, if the settlement blocs were to remain Israeli, there was no reason to oppose construction within them. Thus by declaring construction within the blocs no more legitimate than construction elsewhere in the West Bank, Washington signaled that in fact, it did not believe Israel should retain them.
Last month, however, it made its retraction explicit: Speaking to the Palestinian daily Al-Ayyam, US Consul in Jerusalem Jacob Walles said Rice had told both sides that negotiations must be based on withdrawal to the 1949 lines. The State Department subsequently issued a denial, but its denial said merely that “the US government has not taken a position on borders.” In other words, Washington no longer considers a return to the 1949 lines “unrealistic”; at best, it has “no position” on borders.
Olmert, however, has gutted this provision no less thoroughly: Last month, he told the Knesset Foreign Affairs and Defense Committee that the territorial price of an agreement would be “very close to a formula of one for one.” That means the border will basically be the 1949 lines: If the Palestinians must receive equivalent territory inside Israel for any West Bank territory Israel keeps, any adjustments to these lines will necessarily be minor. Olmert then repeated this in a Rosh Hashana interview with Yediot Aharonot, saying Israel “should withdraw from almost all of the territories, including in east Jerusalem,” and compensate the Palestinians by “close to a 1:1 ratio” for any land it does retain.
CLEARLY, THE world will expect any future government to abide by this, since offers made during one round of negotiations are always the starting point for the next. Thus not only has Washington abrogated its 2004 promise, but Olmert has buried any possibility of resuscitating it.
Sharon claimed to have secured three American pledges in exchange for the disengagement: a free hand in fighting Palestinian terror post-withdrawal, opposition to resettling Palestinian refugees in Israel and support for retention of the settlement blocs. And most Israelis considered this trade-off worthwhile.
Four years later, however, all three have evaporated – just as disengagement opponents warned that they would. And Bush’s letter has become just another bit of fish wrapping.
Benn’s view is hardly unique; virtually all Israeli leftists concur – which makes you wonder whether they inhabit the same country as the rest of us. After all, as Benn himself admitted, “the public does not believe a [Palestinian] deal is possible.” It is equally skeptical about a Syrian deal, though he omitted that detail. Thus to most Israelis, the real waste of time would be for the government to throw itself into trying to solve conflicts they currently deem unsolvable, at the inevitable expense of domestic problems they deem genuinely critical.
For instance, while Benn dismisses “the war on corruption” as “whiling away time,” most Israelis disagree: In a January 2007 Peace Index poll, a large plurality gave this issue top billing, its weighted grade of 31.5 out of 100 compared to 22.1 for the second-place issue (rehabilitating the IDF) and a mere 10.8 for making peace with the Palestinians. And that was before the worst corruption scandals broke, including most of Olmert’s cases, then-finance minister Abraham Hirchson’s alleged embezzlement and the discovery that well-connected businessmen were dictating senior Tax Authority appointments. Thus the issue’s importance has presumably only grown.
And with cause: In Transparency International’s latest corruption index, published last week, Israel fell to 33rd place, down from 30th last year and an all-time best of 16th in 2001. This leaves us tied with the Dominican Republic, behind Chile and Uruguay and well behind the Western countries that are our main competitors, thereby threatening our long-term economic viability.
OR TAKE another issue Benn dismisses: governmental reform. Nothing endangers democracy more than a public conviction that the system is broken. Yet more and more people feel that way, and are therefore opting out of the democratic process. The evidence is incontrovertible: Voter turnout, after holding steady for decades at about 80 percent, plummeted to 69% in 2003 and 64% in 2006.
This disenchantment stems partly from governmental corruption, but there is another, even more critical factor: We are the last remaining Western democracy where voters elect party slates chosen by party hacks rather than individual parliamentarians. Thus people have no real say over who represents them; no way to “throw the bums out” (since the “bums” are usually popular enough with the hacks to secure safe seats on their party’s slate); and no way to influence their representatives, who answer to the hacks rather than the voters.
Ordinary Israelis understand this: Another poll last year found that 61% want MKs elected directly. But only a very determined government could enact this reform.
THEN THERE are all the issues Benn did not mention – like education, where we are dropping steadily in international rankings. The last international assessment tests ranked Israeli 15-year-olds below 28 of the 30 OECD members in reading, math and science. Incredibly, according to an OECD study published two weeks ago, these poor results occurred even though Israel provides more hours of classroom instruction than 19 of the 22 OECD countries for which data exists.
The gravity of the educational decline (and we have not even mentioned our crisis-ridden universities) cannot be overstated. This country’s only natural resource is its citizens’ brainpower. Without nurturing this brainpower, our economy will wither, people will flee, we will be unable to finance our defense and the nation’s very existence will be imperiled.
Moreover, failing schools perpetuate yawning gaps between rich and poor. The well-off compensate by providing supplemental, private education for their children. But that leaves children of the poor with no chance of escaping the cycle of poverty through the time-honored means of education.
Israelis care about nothing if not their children, and I have yet to meet a parent who is satisfied with his children’s public-school education. Thus this issue is of great concern to most Israelis.
OR CONSIDER our dysfunctional police. Underworld assassinations are killing innocent bystanders on the streets, yet police have not managed to indict a single leading gangster: The only underworld kingpins facing charges (the Abergils and Ze’ev Rosenstein) were indicted by US authorities in American courts. Police admit that only one in 100 break-ins results in prosecution; the protection racket is reportedly rampant nationwide; and horrendous snafus are routine, from the 2006 escape of serial rapist Benny Sela to the policeman who stood and watched while a terrorist slaughtered students at a Jerusalem yeshiva this March.
Indeed, it is a standing joke that people file police complaints only to collect their insurance. And since police performance affects everyone’s personal security, this clearly matters greatly to most Israelis.
Reforming the police is a complex problem, but there are some obvious starting places. The population has tripled since the 1960s, while the police force has grown by only 50%; consequently, it is now badly understaffed by Western standards. According to Insp.-Gen. David Cohen, Israel has only 2.7 policemen per 1,000 citizens, compared to five per 1,000 in Europe. Moreover, low salaries and long hours make retaining good people difficult. Both are problems only the government can solve.
These are only a few of many pressing domestic issues. But all have a common root: For 15 years, successive governments have devoted themselves mainly to either negotiating with the Palestinians or suppressing the terror that these negotiations produced. Domestic problems were consequently neglected, and they festered.
Tzipi Livni could thus give her country no better gift for the new year that began this week than to ignore the advice of Benn and his ilk, make do with managing the conflict and devote her energies to domestic problems. Unfortunately, nothing in her record suggests that she will do so. Thus most likely, domestic problems will keep right on being neglected.