The Israeli government's decision to work to reduce the gaps from which Arab society suffers was a step in the right direction. Decisions that were approved regarding public transportation, higher education, infrastructure and industry can reduce some of the barriers preventing tens of thousands of Arab citizens from joining the job market.
There was a good reason why the government reached this decision. The assessment that Israel will pay a high economic price if it does not work to integrate Arabs into the job market is shared by the Bank of Israel and the Ministry of Finance as well. At the beginning of the cabinet meeting at which the plan was discussed, the head of the treasury budget division presented the worst-case scenarios for 2057, to the effect that if no efforts are made to integrate the Arab population into the market, we can expect an increase in Israel's debt-to-GDP ratio, an increase in unemployment and a steep decline in GDP per capita.
Now of all times, when the government is working to reduce the gaps between sectors, we have to take a sober look at the size of the challenge and the depth of the problem of integrating Arabs into the job market. With each passing year, the failure to exploit the work potential of the Arab population costs the Israeli economy NIS 32 billion ($8.2 billion).
There are many barriers preventing the integration of Arab citizens: the distance from centers of employment, the absence of transportation infrastructure, a weak education system, discrimination based on nationality and more. The multiplicity, variety and strength of the barriers demand strong and effective treatment.
The Israeli government encourages Arab employment. For example, between 2010 and 2016, government decisions allocated about a billion shekels to integrate Arabs in the job market. These plans usually addressed supply, and helped with training and preparing Arabs for work, but did not offer a solution for the lack of demand for Arab workers on the part of employers.
The barriers that stem from prejudice (racist, cultural and other) and from the popular "a friend brings a friend" method, prevent the hiring of Arab workers, and we now have an absurd situation in which the Israeli economy is left with a growing supply of workers who want to enter the job market, which is not hiring them. There is no reason to think that this situation will change the more the supply increases: A 2014 survey by the Ministry of Economy on the views of employers indicates that about 22% of businesses that do not hire Arabs believe that it is difficult to recruit Arab workers because of the possible opposition of employees, managers or customers, as opposed to about 4% of businesses that do hire Arabs. In other words, until you employ an Arab worker, you won't be willing to employ an Arab worker.
Already now the country has a cheap and effective method of promoting Arab employment: the use of its purchasing power. Many countries in the world increase the demand for employing weaker groups by including a demand to employ them in government tenders that are issued to the private market.
The government already uses tenders to advance social goals. Between 1993 and 2013 changes were introduced into the Mandatory Tenders Law to encourage the purchase of Israeli textiles, and the forging of connections with businesses owned by women and with small and medium-sized businesses. And if there is need for proof that directly addressing the problem of demand can bring about a positive change, we should examine the government activities to promote fair representation of Arab workers in the public sector, which increased their participation from 4.8% in 2000 to 9.2% in 2014.
The government's steps to encourage Arab employment, as good and important as they may be, are doomed to failure without significant attention to the demand side. Encouraging the employment of Arabs by means of government contracts for goods and service is a solution that Israel can implement simply, cheaply and effectively. The motivation of the private sector to promote Arab employment in the context of such a plan can be found in the tens of billions of shekels spent by the government annually on tenders in the private sector.
Channeling the government's purchasing power to promote Arab employment would complement its efforts to increase the supply of Arab workers, and would create a breakthrough in their integration into the job market, to the benefit of Arab society and of Israel's economy.
The writer is a researcher in the Equality Policy Department of Sikkuy -The Association for the Advancement of Civic Equality
Published by Globes [online], Israel business news - www.globes-online.com - on February 25, 2016
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