During the week exactly these differences in perspectives gradually gave us the impression of Israel as neither having much to do with the socialist sides of its Zionist founding ideas, nor as corresponding to the headlines in this country highlighting religious and political confrontations: The picture was marked by the deep crises of the Israeli economy, by the consequences of the cruel reciprocal crowding out of employees, who are forced into this competition by the labor market policy of the government and the interest politics of the trade associations, and by a widespread and easy to functionalize racism pervading the living and working conditions in Israel. A lot of this is comparable to the experiences made with the neo-liberal programmes no matter of which government in western industrial societies during the last years, some of this refers to the specific problems caused by the unsolved conflict between Israel and Palestine.
Yuval Rachlewski, head of the department of Wages and Employment in the Ministry of Finance, and his advisors imparted a familiar picture of macroeconomic conditions and neo-liberal strategies in dealing with the crises: between 1995 and 2003 among the 2.5 millions employables (with 6.78 millions inhabitants according to the figures of the Central Bureau of Statistics in Jerusalem in April, 2004) unemployment was surging from 6.9 to, for Israeli conditions, an unusual high of 10.3 per cent, while the living standard was falling by 10 per cent in the same space of time. Rachlewski explains this as a combined effect of "internal" factors, like the reduction of domestic demand, and "external" factors: decreasing growth rates on the world market, the crises of the US economy (ahead of the Palestinian territories as the most important outlet market for Israel) as well as the collapse of the high tech and IT market that is so important for Israel were leading to a decline in exports and decreasing growth within Israel. Among the "external shocks" Rachlewski counted the "Palestinian terrorism" that were responsible not only for the slump in the tourism branch but also for the declining readiness to invest in and to Israel.
The government reacts to the recession with a severe economy and privatization programme, the team continued to explicate. This includes harsh cuts in social benefits (like the planned increase of the retirement age from at first 67 to subsequently 70 ) and therewith a refrain from the claim of a comprehensive state-run welfare system that due to Zionist ideas had been developed since the founding of the State of Israel as well as a general reduction of the state quota: alongside the privatization of public enterprises in public service, so far employing a third of the wage earners, there shall be steep cutbacks in jobs. At the same time the government signed wage agreements for the public sector with the Histadrut, settling on wage cuts up to 4.3 per cent for the years 2003 to 2005, a waiving of the adjustment of benefits on the national Cost of Living Standard as well as a waiving of several other benefits, like vacation pay etc. A package of measures including privatizations, outsourcing, wage cuts, cutbacks in jobs, flexibility and the introduction of barriers in the right to strike – Israel has the most strikes worldwide, especially in the public sector – shall lead to an increase in growth and employment, the team taught about the hopes of the Minister of Finance Benjamin Netanyahu. The government sets off with the "lacking inclination to work": "Go to work" is the slogan extensively displayed on public billboards, calling on the population not to rest in the "social hammock". The program "From welfare to work" enforces the appeal.
However, this so far well-known argumentation does have a false bottom. With unemployment figures of about 11 per cent it was "irrational", said Rachlewski, that the proportion of labor migrants had risen from 30,000 to 300,000 from the early 1990s to 2001. At about 12.5 per cent of the labor force the percentage of foreign people in paid work is higher than in Switzerland and more than twice the average for the industrial West. While the government today acts according to the slogan "Israeli first" and therewith pursues the idea of a national Israeli labor pool (partly thinking of Jewish Israelis exclusively), in the past it didn’t have so much of a problem with the employment of labor from abroad, Arab Israelis and even Palestinians. This can be shown on the basis of the situation in the construction industry, next to nursing (in the public sector) and agriculture the sector where traditionally most Arab and respectively Palestinian labor worked, before in the course of recruitment programmes more and more laborers from abroad were enlisted.