Study Says Israel Must Adapt Economy to Provide Jobs for Immigrant Talent

The massive influx of immigrants from the Soviet Union confronts Israel with the biggest challenge in its history. But it is also, potentially, the greatest blessing since the wandering Israelites were showered with manna from heaven.

That is the conclusion of a 79-page report for Israeli policy-makers, just released by the Bank of Israel, the country’s central bank.

It was prepared by Hebrew University Professor Gur Offer and two Bank of Israel researchers, Drs. Karnit Flug and Nitza Kassir.

If the political echelons take heed, they will stop agonizing over how to absorb the thousands of newcomers into Israel’s economy but get busy readjusting the economy to make the best use of the new talent.

Soviet aliyah is an economic blessing because of the high percentage of university graduates and trained professionals among the olim, the authors say. In terms of “human capital,” Israel in a short time could become one of the richest countries in the world.

Today, nine of every 100 employed Israelis has a graduate degree, compared to 5 percent in the United States. When Soviet aliyah reaches 500,000, the number of people in the economy with advanced degrees will reach a record 11 percent, the authors say.

Those graduates will need to be employed, and currently Israel’s job scene is less than satisfactory. The national unemployment rate reached 10 percent in the second quarter of this year, up 0.2 percent from the first quarter.

One way to absorb new immigrants is to throw them into whatever jobs are available, as quickly as possible. That means hundreds of doctors, engineers and college professors doing menial work.

The alternative is to list the special vocational skills the new olim bring with them and tailor employment opportunities to fit those skills.

The authors of the report clearly favor the latter approach.

IMPRESSIVE BACKGROUNDS

The professional breakdown of new Soviet immigrants is impressive. Four out of 10 have university degrees in such fields as biology, engineering, architecture, medicine, pharmacy, veterinary medicine, law and teaching. Others are accountants, journalists, nurses and technicians.

If these immigrants find jobs that match their skills, they will be happier, adjust to Israel more quickly and likely remain here.

But if they do not find suitable jobs, they will become a source of deep frustration.

“The quality of employment offered the first wave of immigrants will affect the readiness of additional immigrants to come to Israel and the tendency to yeridah,” or emigration from Israel, the authors of the study write.

To offer high-quality employment, the economy must literally be stood on its head, they say.

At present, 40 percent of working Israelis are employed in the service sector, a third work in academia and 23 percent do menial labor.

To achieve the goals necessary for successful aliyah, the public sector must shrink and high-tech industries will have to expand.

There are two obstacles. Some olim will have to change their vocations. There is not enough room in Israel for an influx of medical doctors, to mention one overcrowded profession.

But the most serious barrier is limited economic resources. Adjusting the economy to a highly educated aliyah will take enormous investments in industry.

According to the study, Israel will need a mind-boggling $13 billion in investments. Where it will come from is a question the researchers do not attempt to answer.

Because of the Labor Day holiday in the United States, the JTA Daily News Bulletin will not be published on Monday, Sept. 2.

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