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Immigration (for Jews), Israeli Style

The Promised Land

by MOSHE ADLER

When it comes to immigration, the pro-labor camp finds itself in an awkward position. How can it choose between workers who are citizens and workers who are not? But Israel, which, like this country, is also a country of immigrants, has shown that immigration does not have to involve a choice. On the contrary, good policies immigration can be an asset that benefits all members in society, new immigrants as well as old-timers.

Of course, Israel’s immigration policies were established for all the wrong reasons and the goal of these policies remains changing the racial composition of Israel and the occupied territories. But it is this very goal that forced Israel to establish policies that cause all classes of (Jewish) society to support immigration.

What makes Israel a laboratory for the study of immigration policies is the size of its immigration. In the U.S., 39% of the population growth in the years 1990-2004 was due to immigration; in Israel during the same period 86% of the population growth was due to immigration. Of course, the concern in the U.S. is not about all immigrants, just about illegal immigrants. Labor is concerned that because immigrants come without any assets they are forced to accept whatever low wages are offered to them, driving wages down. Many American taxpayers are concerned that illegal immigrants may need public assistance because of their poverty. In Israel, on the other hand, virtually all of the immigrants are legal. But this is actually not an important difference, because the immigrants who come to Israel are nevertheless extremely poor. Most of them, 80% in the years 1990-2004, come from the former Soviet Union. So how does Israel deal with this influx of destitute immigrants?

The major difference between the U.S. and Israel when it comes to immigration is that while the U.S. government wants to stop economic refugees from coming, the Israeli government wants to encourage Jews to come, regardless of their economic situation. And it is this difference that makes the Israeli policies instructive. The dilemma for Israel is that on the one hand it must treat its immigrants well, or they will stop coming. On other hand, if the government wants the public to support immigration, it cannot afford for its citizens to harbor anti-immigration sentiments, certainly not of the sort that resulted in Proposition 187 in California, for instance. (That proposition called for denying public benefits to illegal immigrants and only an intervention by the courts prevented it from becoming law.) The Israeli solution to its dilemma is the mother of all paradoxes: How does the Israeli government make its citizens welcome these destitute immigrants? By showering the immigrants with generous public assistance.

Jews who immigrate to Israel receive welfare for 18 months, which in Israel is not called welfare but "Assured Income." In addition, immigrants get subsidized mortgages if they wish to buy apartments and rental subsidies for five years if they wish to rent. Immigrants can also get free vocational training, and grants are given to university students. Finally, free health insurance is available to all immigrants for six months.

But perhaps this is less paradoxical than it seems. What these public benefits do in the first place is to stop the immigrants from accepting, out of desperation, wages that are too low. Such low wages would make not only the immigrants themselves poor, it would also push everyone else’s wages down. The vocational courses make the immigrants more productive and push their wages even higher. Second, because these immigrants are given ample means with which to buy or rent homes and the many other commodities that immigrants need, their arrival gives the Israeli economy a serious boost, one that benefits all Israelis. Of course, taxpayers do pay for these benefits. But the burden of the immigration is borne by the entire Israeli population, instead of by a select group"by lower wage workers"as is the case in this country. And in the end, the expense proves not to be a burden but instead a good investment, since once the immigratns start working they are in position to pay back much more than they have received.

In the U.S., the debate about immigration pits the camp that sees immigrants as destitute people who deserve sympathy against the camp that sees immigrants as competitors in the lower wage labor markets. The Israeli experience shows that immigrants do not have to be either pitied or loathed. With the right policies, what,s good for immigrants can be good for old timers as well. This is a trick worth learning and applying, not only to immigrants but to low wage workers in general.

MOSHE ADLER is the director of Public Interest Economics, an economic consulting firm and I teach economics in the department of urban planning at Columbia. He can be reached at ma820@columbia.edu or through my website: www.columbia.edu/~ma820