Steve Kramer

Newsweek Downplays Israel’s Success

In the May 10, 2018 issue of Newsweek, this article by Yardena Schwartz appeared: MORE ISRAELIS ARE MOVING TO THE US —AND STAYING FOR GOOD. Ms Schwartz is a well known, respected journalist, but this article seems to have a chip on its shoulder. It reminds me of the brouhaha here in Israel about the price of cottage cheese in Israel.

When it became known several years ago that a top selling brand of Israeli cottage cheese sold for less in Berlin (and other places) than in Tel Aviv, Israelis were outraged. The media was full of stories about how many Israelis had moved to the “good life” in Berlin (for cheaper cottage cheese?). So, how many Israelis actually live in Berlin? Estimates range from 11,000-15,000. That’s a rather small percentage of the 6.6 million Israeli Jews, about 1/4 of 1%.

The above mentioned overblown story is similar to Schwartz’s article, which makes it seem that, in her words, young Israelis “are leaving the country in droves.” Not surprisingly, Schwartz has found several people who have emigrated from Israel and are happy with their choice. But that’s hardly the complete story.

The UN World Happiness report gets quite a bit of coverage for its annual reports. Israel ranked near the top of the report for the last several years. In 2018, Israel was ranked as the 11th happiest country. (USA ranks #18.) That, despite Israel’s location among Arab countries, several of whom border it and are dire enemies of Israel.

Schwartz says that, “at least 1 million Israelis” live in America. I can’t find substantiation for such a high figure. Estimates are that 600,000 Israelis live outside of Israel, out of about 900,000 who left throughout the years since independence in 1948. It’s interesting that the majority who leave Israel were not born in Israel. (That fact strikes close to home in my own family.)

In the last decade, about 16,000 new immigrants made aliyah annually to Israel. That’s similar to the number who leave the country, but half of those later return home to Israel. Since 1948, Israel has absorbed millions of immigrants, including about 1 million from the former Soviet Union in the early 1990s. In fact, Israel is the world’s largest immigrant absorbing nation. It has absorbed more than 350% of its population over 70 years.

At the end of 2017, 8.9 million people lived in Israel, about 75% Jewish. Israel’s population is projected to grow to 10 million by the end of 2024, to 15 million by the end of 2048, and to 20 million by the end of 2065. It is already one of the most densely populated among the world’s largest economies.

Schwartz cites worries about the growing proportion of ultra-Orthodox in Israel’s population as a reason to emigrate, considering that the religious mens’ participation in army service and the work force is low and that the coalition government structure gives the ultra-Orthodox much political power. Schwartz reports that this sector will be nearly 50% of the population by 2065. Actually, most predictions show an increase from 11% in 2015 to 20% by 2040 and 32% by 2065. Admittedly, even the lower figures are a lot.

As with all predictions, there is no certainty that they will be accurate. However, one can say with certainty the Arab Israeli fertility rate has fallen rapidly (as has the Palestinian Arab rate) while the Jewish rate has risen dramatically. Yes, the ultra-Orthodox families and the Beduins have many children, but the “secular” Jewish families in Israel typically have three children, far above any other Western country. At this time, with the Arab downtrend and the Jewish upward trend, the percentage of the Jewish population is increasing, with slightly more Jewish births per mother than Muslim Arab births.

It is often mentioned that it’s easier to get ahead in the US than in any other country, including Israel. That’s probably true. But the difference is not as great as one imagines. The cost of living in Israel is higher than in America, but that’s not the whole story. These statistics show an interesting comparison:

median annual family income USA: $59,000; new car cost: $33,500
median annual family income Israel: $58,250; new car cost : $36,500

annual medical costs per person USA: $10,345
annual medical costs per person Israel: $2,425
(Israel has the 8th longest life expectancy in the world: 82.0 years, more than the United Kingdom, the United States and Germany.)

average cost of college tuition in USA: $21,000 (@5 years for most to attain degree)
average cost of university tuition in Israel: $2,900 (@3 years for most to attain degree)

housing: much higher cost to buy a home – usually an apartment – in Israel, but less to rent one.

Schwartz writes about the brain drain of Israelis, but this subject is not so simple. Israel has amongst the very highest ratio of university degrees to population in the world. The number of Israelis who attain PhD degrees is far larger than a small country such as Israel can employ. Therefore, many leave for post-graduate training or jobs in other countries. Nevertheless, Israel has won more Nobel Prizes per capita than the United States, France and Germany.

The alternative to stop the brain drain would be for fewer Israelis to attain higher degrees, thereby lessening the need to search for work outside of Israel. That would probably not be a good alternative for many reasons.

Schwartz talks about the high percentage of poverty and income inequality in Israel. True. Israel has a relatively high poverty level, including much income inequality (about the same or better than USA). However, the two largest contingents of those in “poverty” choose that status by not choosing to join the work force. Those contingents are ultra-Orthodox men and Muslim women, both of whom are conforming to societal norms in their peer groups. At any rate, the percentage choosing not to work is declining yearly in both groups. Interestingly, the labor participation rate overall is slightly higher in Israel than in the US!

Israel is known, for good reason, as the Start Up Nation (Check out the book of that name.) Schwartz says that the impact of hi tech on the majority of Israelis is not great. This is nonsense. Hi tech jobs are the backbone of the middle class, with many young people aspiring to work in start up companies. The Russian aliyah of the 1990s was instrumental in building up Israel’s high tech sector. Without this backbone of the Israeli economy, Israel’s economy and “happiness” would not be as great.

According to Schwartz, “many” of the average young people say, “There’s simply no future in Israel.” That is rubbish, as “many” Brits like to say. As far as the ECONOMY is concerned, Israel has one of the world’s strongest, with a growth rate far in excess of Europe’s or America’s. Israel’s fertility rate is the highest among the OECD and its average age is the lowest, reducing the impending major shortfall of funding for pensioners which hangs over all other developed countries.

Yes, there are problems ahead for Israel, but probably fewer than for most other members of the prestigious OECD (Organization for Economic Cooperation and Development). I say, “things will change because they must change.” Israel’s forte is not in long range planning, but in solving problems in real time. Israel will not bankrupt itself to support non-productive sectors, because the taxpayers won’t allow it. There is a great future for Israel because Israelis will make it happen.

About the Author
Steve Kramer grew up in Atlantic City, graduated from Johns Hopkins in 1967, adopted the hippie lifestyle until 1973, then joined the family business for 15 years. Steve moved to Israel from Margate, NJ in 1991 with his family. He has written more than 1100 articles about Israel and Jews since making Aliyah. Steve and his wife Michal live in Kfar Saba.
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