Israelis Squander Future By Overspending

In November 1997, about 1½ years after Benjamin Netanyahu was first elected prime minister, nongovernmental organization (NGO) Yedid was founded, with the goal of supporting the socioeconomically disadvantaged and strengthening social solidarity. Those were the days of the first large-scale privatization measures in the market, which Netanyahu championed, and the absorption of a large wave of immigration from the former Soviet Union. That year, almost all of those who came to the organization seeking help were new Russian-speaking immigrants. Sixteen years later, nearly half of those who turn to Yedid are of the Israeli lower middle class, who earn NIS 6,000 to NIS 11,000 [about $1,700 to $3,150] a month and cannot adequately support themselves. 

This dry data is further proof of the fragile state of the Israeli middle class, which, despite the social protest that began in the summer of 2011, is becoming a weak class in need of legal and defensive aid in facing the state. This is precisely the core of voters for Yesh Atid, the party of Finance Minister Yair Lapid, who turned in a short time from the hero of the middle class during the election campaign to its enemy.

Ran Melamed, deputy director of Yedid, has been at the center of social struggles in Israel in the last few years. With Rosh Hashana [Jewish New Year celebrated on Sept. 4, 2013] approaching, he speaks in an interview with Al-Monitor about a society that is losing its middle class and its solidarity, and about the rule of bureaucrats, who, in his view, manage the state and control government ministers.

Yedid Deputy Director for Communication and Social Policy Ran Melamed, at his office in Jerusalem, April 2013. (Courtesy Yedid Office Staff)

Contrary to the common trend these days, Melamed does not rush to blame the situation on the finance minister. In mid-August, Melamed met with Lapid for a long meeting, from which he came away with a sense that Lapid’s intentions are good, and that he understood he must fix several of the problems in the budget.

Al-Monitor:  Ran, isn’t it a bit too late for Lapid and for the middle class?

Melamed:  “I have a problem with Lapid’s worldview regarding the middle class, but I’ve found that he is receptive to the issues I brought up, such as the difficulties of working single moms and the problems of employment for elders. I can tell you that 24 hours after the meeting, he started moving forward on issues related to the problems I presented to him.”

Al-Monitor:  What is the problem with his worldview?

Melamed:  “The issue with Lapid is that he can’t stand welfare payments. He basically tells people, 'Go work,' and this is a paternalistic attitude. Most of the single moms work. So you can’t say that they are parasites and give them no support. But I have a feeling that Yair Lapid is now trying to fix the problem, and I get the impression that he intends to do things differently.”

Al-Monitor:  How is that? After all, he brought a budget without a vision that directly hurt the working middle class. This is what the protest was about, and this is why he was elected. 

Melamed:  “The problem is with the bureaucrats at the Finance Ministry who mislead the Knesset and the ministers. We have recently conducted a study, which we’re about to complete, in collaboration with the law department at Haifa University. We examined the statutory position of government decisions and found that bureaucrats find ways to remove all content from them and not to carry them out, because government decisions have no legal standing. This is how they dissolve.

“This is happening now with Lapid, too. He has a vision, but some of the decisions he makes are based on misleading statistics the bureaucrats of the Finance Ministry provide him. They basically control the ministry. I wrote him on a number of occasions, telling him that the bureaucrats of the Finance Ministry are misleading him, and that he’s basing decisions on the wrong data.

“There were times when I came to Knesset committee hearings, and bureaucrats there explained why government decisions can’t be executed, using legal claims. We are now working in conjunction with members of the Knesset to pass a law that would grant government decisions' legal status.” 

Al-Monitor:  As someone who is closely familiar with Israel’s economic and social troubles, what worries you the most 10 days before Rosh Hashana?

Melamed:  “The protest that broke out two years ago impacted only a small part of the population. Sadly, most of the public has not undergone a change in consciousness. We have turned into a very hedonistic society, and the concept of solidarity exists only on the margins. Instead of stopping to pay high rents and uniting against the landlords, people continue to pay. Generally, people here live for the day and do not plan for tomorrow or look forward. It’s very sad.”

Al-Monitor:  Escapism?

Melamed:  “A very strange thing is happening here. The situation of the middle class is more tenuous, yet it spends more money. You see people traveling abroad, sitting at restaurants, upgrading their cell phones and taking out more loans, and not thinking about tomorrow. The malls are full and people spend money they don’t have. Maybe there’s a psychological explanation for it. Out of despair people buy without thinking. They don’t think about the future and don’t save for a pension. It’s worrying, because they need to be more responsible.”

Al-Monitor:  You started as a NGO where most of your clients were low-income, and today almost half of your clients are middle class. What does this mean, that the disadvantaged don’t need as much help?

Melamed:  “Actually the government does help the weaker socioeconomic strata. In the last two years, there’s constant improvement in the treatment and the budgets allocated to Holocaust survivors. In Israel today, there are about 140,000 Holocaust survivors. Many bureaucratic difficulties with this population are being solved. I expect that their situation will improve this year. The treatment of senior citizens is also better, and the budget of the Ministry of Welfare has increased.  In general, there’s a chance that good things will happen with this government.”

Al-Monitor:  You do know that in this appraisal you are unusual among the leaders of NGOs and social activists?

Melamed:  “I know, but I really think that Yair Lapid wants to do things differently and fix his mistakes.” 

Mazal Mualem is a contributing writer for Al-Monitor and formerly a chief political analyst for Maariv and Haaretz. She also previously worked for Bamachane, the Israeli army's weekly newspaper.