US Embassy Economic Officer Dewitt Conklin told a panel discussion at the University of Haifa in Israel on January 19 that the economic protests in Israel were impressive both for their size and for the speed with which the government sought to respond. The comment was made in a comparison of the characteristics and results of the social protests that have evolved in Israel and the United States.   “When I examined the claims of the economic protesters in Israel that prices were too high for households to bear, I saw that there was solid statistical evidence in support of this claim. The response of the Israeli government to last summer’s economic protests was striking. It quickly engaged with the issues raised by the protests and set up committees which provided detailed recommendations on how to address causes of high prices. Indeed the government has already passed some legislation addressing the issues:  giving free schooling to children from age 3 (instead of 6) and lowering custom tariffs on several hundred basic products.”

“Seeing Israel’s summer protests, I wondered whether that sort of thing could happen in the United States at this time. And shortly after that I saw the first reports of similar economic protests in the US”  The US protests took a somewhat different, less focused course, which coalesced to a degree around the theme of “the 99% versus the 1%,” reflecting concerns about rising income inequality in the US economy. According to Conklin, this slogan, as with the protests in Israel, was based on a core of truth. “In recent years, households in the top 1% income bracket have earned as much as the bottom 60%, and held as much wealth as the bottom 90%. In the period between 2002 and 2007, two-thirds of the increase in income in the US economy went to the top 1%.” Conklin told the panel that the issue facing the US was more complex than one simply of high prices.

Globalization of the world’s labor market and technological advances had resulted in a large scale shift of manufacturing and administrative jobs to overseas workers. That shift was reflected in actions of large multinational corporations which represent 25% of the US economy. These companies had reduced their US workforces by 2 million jobs between 2000 and 2010 while hiring 2.5 million workers overseas. In recent years, the growth areas in the US labor market have been in high skill, high paying jobs and in low skill, low paying jobs. The moderate skill, medium wage jobs were no longer being created in the numbers that they had been in the post-war period from 1945 to 1980. How best to respond to this long-term change in the US and global economies is the challenge facing the US government.   “The protests and the governmental responses have been different in some key ways. The main issue in the Israeli protests was the problem of the high cost of living relative to income, while in the US the issue was a broader structural issue of a substantial decrease in middle income jobs,” Conklin said.

The US Embassy representative noted that Israel’s social protests were significantly more organized and received a quicker and stronger response from the government. “I think the willingness of the government to act quickly to try to re-balance the economic equation comes, in part, from the egalitarian roots present at the creation of the State of Israel.”  In contrast, the economic protests in the US have been strikingly unorganized and based on a more complex cause – the decrease in medium income jobs.   Addressing this change in the US economy will be extremely challenging, both from a policy and political perspective, summarized Conklin.

(YWN – Israel Desk, Jerusalem)