AJC Mideast Briefing: The Exasperated Israeli Middle Class
Ed Rettig, Director, AJC Jerusalem
July 26, 2011
Ron, 58, whom I met in basic training in 1972, made enough as a banker to retire twelve years ago. He is also a major in the IDF reserves. Ron was a Peace Now activist and retains a strongly leftist worldview. Over the last week he spent most of his time participating in a riveting social development, the protest tent city on Rothschild Boulevard in Tel Aviv. Similar tent cities have sprung up around the country, from Kiryat Shemonah in the North to Be’er Sheva in the South. The target of their protest is the outrageous price of apartments in Israel.
The tent cities constitute a kind of street democracy where all can have their say. All kinds of people—professors of economics, cabbies, random passersby—stop to join the discussions. Saturday night saw a demonstration of unusual size as tens of thousands joined to protest the lack of affordable housing.
Ron describes it as one of the most moving educational experiences of his life. He is himself economically secure, but looking at our children’s generation—as he puts it, “my daughter, your three sons and two daughters-in-law”—he argues heatedly that ”the tycoons” have taken away the very possibility of their ever owning their own homes.
Over the last few months there have been a number of similar expressions of middle-class exasperation keyed to other issues. Just as a strike by the senior medical establishment was winding down, the junior doctors struck over appallingly low wages and the inhuman hours they are required to work, as well as the deterioration of the quality of medical services resulting from declining budgets. And a spontaneous Facebook-organized boycott of cottage cheese, an Israeli breakfast staple, succeeded in nullifying a sudden price rise that raised suspicions of price fixing by the three largest dairies in the country.
Apparently the Israeli economic miracle has not worked for much of the population. While a large, creative and productive sector of our society raised its living standards substantially by tapping into the international hi-tech economy, the majority of Israelis still maintain a standard of living not all that different from what their parents knew, but with a considerably more porous safety net. It is hard to escape the contrast between the relatively low salaries paid to so many of the people who make the country work—the teachers, doctors, nurses, truck drivers, factory workers—and the high-flying lifestyle that has driven prices of even modest apartments in Tel Aviv out of reach of all but the top two deciles of the population. At some point, something has to give. As one newspaper headline put it: “An entire generation wants a future.”
It is interesting to note who is not involved in initiating these protests. Knesset members were not active at the tent cities or in the doctors’ strike and the cottage cheese boycott. When some tried to join they were asked to leave, and the embarrassing encounters of two of them (Laborite Amram Mitzna and Likud’s Miri Regev) were broadcast on the Israeli media. Also missing from the demonstrations is the element that emerges with great regularity to demonstrate on behalf of the settlers. Quite possibly a new and, until now, silent political force may be coalescing.
Prime Minister Netanyahu, acutely aware of the potential political damage if his government mishandles the housing protests, has responded in two ways. First, he declared that he “embraces the demonstrators” and will seek to fast-track reforms of the tax and real-estate codes that will free up significantly more land for construction. Second, the Likud-dominated National Student Association seems to be trying to upstage the apolitical leadership of the tent cities.
However it is no simple matter to deflate the real-estate market, since much of the debt owed by individuals and institutions in Israel is tied to equity in homes, and we have seen precipitous drops is housing prices cause numerous national economies to plummet. The challenge will be a difficult one - to solve the problem of affordable housing without undermining economic stability.
But there is an even deeper challenge. Israel has largely freed up its economy, leaving behind the egalitarian, centralized, socialist, suffocating economy of the State’s early years. For that, Israelis may be paying a high price in social cohesion. Is that price worth it? How do we allow for the growth that only an entrepreneurial economy can provide while making certain that large sectors of the population are not left behind?
This question is crucial at a time when the threats from Iran and from our unstable immediate neighbors may make the very defense of our lives dependent on our sense of solidarity.
July 26, 2011
Ron, 58, whom I met in basic training in 1972, made enough as a banker to retire twelve years ago. He is also a major in the IDF reserves. Ron was a Peace Now activist and retains a strongly leftist worldview. Over the last week he spent most of his time participating in a riveting social development, the protest tent city on Rothschild Boulevard in Tel Aviv. Similar tent cities have sprung up around the country, from Kiryat Shemonah in the North to Be’er Sheva in the South. The target of their protest is the outrageous price of apartments in Israel.
The tent cities constitute a kind of street democracy where all can have their say. All kinds of people—professors of economics, cabbies, random passersby—stop to join the discussions. Saturday night saw a demonstration of unusual size as tens of thousands joined to protest the lack of affordable housing.
Ron describes it as one of the most moving educational experiences of his life. He is himself economically secure, but looking at our children’s generation—as he puts it, “my daughter, your three sons and two daughters-in-law”—he argues heatedly that ”the tycoons” have taken away the very possibility of their ever owning their own homes.
Over the last few months there have been a number of similar expressions of middle-class exasperation keyed to other issues. Just as a strike by the senior medical establishment was winding down, the junior doctors struck over appallingly low wages and the inhuman hours they are required to work, as well as the deterioration of the quality of medical services resulting from declining budgets. And a spontaneous Facebook-organized boycott of cottage cheese, an Israeli breakfast staple, succeeded in nullifying a sudden price rise that raised suspicions of price fixing by the three largest dairies in the country.
Apparently the Israeli economic miracle has not worked for much of the population. While a large, creative and productive sector of our society raised its living standards substantially by tapping into the international hi-tech economy, the majority of Israelis still maintain a standard of living not all that different from what their parents knew, but with a considerably more porous safety net. It is hard to escape the contrast between the relatively low salaries paid to so many of the people who make the country work—the teachers, doctors, nurses, truck drivers, factory workers—and the high-flying lifestyle that has driven prices of even modest apartments in Tel Aviv out of reach of all but the top two deciles of the population. At some point, something has to give. As one newspaper headline put it: “An entire generation wants a future.”
It is interesting to note who is not involved in initiating these protests. Knesset members were not active at the tent cities or in the doctors’ strike and the cottage cheese boycott. When some tried to join they were asked to leave, and the embarrassing encounters of two of them (Laborite Amram Mitzna and Likud’s Miri Regev) were broadcast on the Israeli media. Also missing from the demonstrations is the element that emerges with great regularity to demonstrate on behalf of the settlers. Quite possibly a new and, until now, silent political force may be coalescing.
Prime Minister Netanyahu, acutely aware of the potential political damage if his government mishandles the housing protests, has responded in two ways. First, he declared that he “embraces the demonstrators” and will seek to fast-track reforms of the tax and real-estate codes that will free up significantly more land for construction. Second, the Likud-dominated National Student Association seems to be trying to upstage the apolitical leadership of the tent cities.
However it is no simple matter to deflate the real-estate market, since much of the debt owed by individuals and institutions in Israel is tied to equity in homes, and we have seen precipitous drops is housing prices cause numerous national economies to plummet. The challenge will be a difficult one - to solve the problem of affordable housing without undermining economic stability.
But there is an even deeper challenge. Israel has largely freed up its economy, leaving behind the egalitarian, centralized, socialist, suffocating economy of the State’s early years. For that, Israelis may be paying a high price in social cohesion. Is that price worth it? How do we allow for the growth that only an entrepreneurial economy can provide while making certain that large sectors of the population are not left behind?
This question is crucial at a time when the threats from Iran and from our unstable immediate neighbors may make the very defense of our lives dependent on our sense of solidarity.
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