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18th Caesarea Forum - The Employment of Arabs in Israel
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Date Published:
6/15/2010
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Last Updated:
6/20/2010
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Category:
Events, Research and Programs
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On June 16-17, 2010, IDI convened leading scholars, policy-makers, and business leaders for two days of intensive deliberations at the 18th annual Caesarea Economic Policy Planning Forum, Israel's largest and most influential economic conference. The central issues explored during the 2010 conference, which convened in the city of Nazareth, included: Current and Future Challenges to Israel's Job Market, Israel’s Third Sector and its Relationship to the Public and Business Sectors, and Macroeconomic Policy in the Wake of the Global Economic Crisis.
Following is a summary of the findings of the work team that focused on Employment in the Arab Sector, a topic that was presented during the session on challenges to the Israeli job market.
Team Leader:
Dr. Yosef Jabareen, Faculty of Architecture and Town Planning, The Technion – Israel Institute of Technology.
Team Members:
- Shuruk Ismail, Program Director of the Arab Community Program, Yad Hanadiv
- Dr. Ramzi Halabi, University of Tel Aviv; Gordon College
- Helmi Kittani, CEO, The Center for Jewish-Arab Economic Development
- Architect Amin Sahly, City Engineer of Tamra
- Sami Saadi, CPA, Founder of Tzofen
- Yaser Awad, Director of Fair Representation and Employment Equity Project, Sikkuy; Sakhnin College
- Prof. Daniel Czamanski, Associate Dean for Research, Faculty of Architecture and Town Planning, The Technion – Israel Institute of Technology
- Nitsa (Kaliner) Kasir, Head of the Labor Market and Welfare Policy, Research Department, Bank of Israel
- Imad Telhami, Entrepreneur and Owner, Babcom Centers
- Attorney Irit Tamir, CEO, Kav-Mashve
Research Assistant:
Ofer Dror, The Israel Democracy Institute; Department of Economics, The Hebrew University in Jerusalem; ERCG.
Introduction
The participation of the 1.5 million Arabs in Israel in the workforce is an extremely complex and significant challenge for Israel and its economy. The Arab employment rate in Israel, which is lower than that of the rest of the population in the country, is one of the lowest in the world. The situation of the Arabs as individuals and as members of a national minority is problematic and can have far-reaching implications for the relations between the Arab minority and the State and its institutions. The situation is also particularly difficult from the perspective of distributive justice and economic growth in Israel. The OECD countries have also confronted Israel with the important challenge of employing Arabs and closing the gaps between Arabs and Jews in Israel. The summary that follows presents the main obstacles to the employment of Arabs and their economic development, as well as principal recommendations for amending the situation.
Main Obstacles to the Employment of Arabs
- There are two economies in Israel: one is the well-developed, modern, Jewish economy, which continues to advance, and the other is the lagging, undeveloped Arab economy, which has suffered from institutional discrimination for several decades. The most serious results of this situation are a high level of poverty among the Arabs; large economic gaps between Arabs and Jews; the alienation of the Arabs from the State and its institutions; and an adverse impact on Israel’s economy and GDP.
- In a hypothetical situation of economic equality between Arab and Jewish men in the areas of employment and income, the earnings of employed Arab men would be NIS 37 billion, instead of the current NIS 27 billion. This constitutes an increase of NIS 10 billion, or 36%. In addition, in a hypothetical situation of economic equality between Arab and Jewish women, the income of Arab women would be NIS 28 billion, rather than NIS 7 billion. This constitutes a NIS 21 billion, or 300%, gain. In other words, the lost potential to Israel’s economy as a result of the failure to utilize the potential of the Arab male and female labor force amounts to NIS 31 billion a year (based on 2006 data).
- Today there are 13,500 Arab university graduates who are unemployed. According to the social survey undertaken in 2008 by the Central Bureau of Statistics (CBS), 9,000 of the 10,000 female Arab university graduates who are unemployed have lost hope of finding employment. There are also 3,500 male Arab university graduates who are unemployed. In five years – if the government continues the trend of non-intervention in the employment of Arabs – the number of unemployed Arab graduates is expected to reach 30,000.
- The vast, ever increasing economic gaps between Jews and Arabs in Israel, which exceed those in the OECD countries, are manifested in the following spheres, inter alia:
- Employment rate: 42% for Arabs in contrast to 59% for Jews
- Per capita income: In 2007, while the average gross monthly wage in the Arab sector was NIS 5,419, it was NIS 8,056 among Jews. Similarly, the hourly wage of Arab males is 30% lower than that of Jewish men with the same level of education. There is a 23% difference between the wages of Arab and Jewish women.
- Poverty level: Approximately 50% of Arab families live below the poverty line (after transfer payments and taxes) compared with about 15% of Jewish families.
- Occupation and industry: Only 1% of the employees in the high-tech industry are Arab.
- Unemployment rate
- Local development levels
- Employment opportunities
- Financial assistance options
- Lack of local employment and of industrial zones: Our findings indicate that only 2.4% of all industrial zones in Israel are located in Arab settlements. In Nazareth Elite (Upper Nazareth), for example, which has a population of 42,000 inhabitants, there are five industrial zones. The area of the Tzipporit Zone alone, approximately 6,000 dunams, is larger than all the developed industrial zones in all the Arab settlements in Israel combined. By contrast, the industrial zones in Nazareth, the largest Arab town in Israel, which has about 66,000 inhabitants, account for only 150 dunams.
- The participation rate of Arab women in the labor force in Israel is one of the lowest in the world, currently standing at 21% as compared to 57% among Jewish women. This rate, which is lower than the average in the Arab world and is far below the average in the OECD countries, has many and varied ramifications, including greater poverty; the underutilization of the market’s economic potential; wider gaps between Jews and Arabs; the slow development of an Arab middle class; the increased alienation from the State and its institutions; and the impairment of the status of women in general.
- Arab men and women have a strong desire to work. In 2008, the employment rate of Arab men was 62.4%, while that of Jewish men was 61.5%. A study undertaken by Yosef Jabareen found that 43% of unemployed Arab women are prepared to accept employment immediately if given the opportunity. The conclusion is that if the rate of those willing to work is combined with the actual employment rate of Arab women (about 21%), the employment rate will be similar to that of Jewish women.
- Arab human capital is progressing with time, but there are still gaps between it and its Jewish counterpart. For example, there has been a marked improvement among Arabs in the area of education: Between 1961 and 2007, the average number of years of schooling rose from 1.2 to 11.3, which signifies a more than nine fold increase. However, there are still gaps between Arabs and Jews in the area of education, especially in terms of government investment. Note that the increase in education level has not found significant and appropriate expression in the sphere of employment, which is unprecedented in the world economy, according to the OECD report.
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