Independence Day No. 68: Stronger and More Prosperous Than Ever

The State of Israel is amazing. Aliyah is higher than it’s been in a decade, Israelis are content with their lives, unemployment is microscopic, and new economic data show that Israel’s employed citizens earn better livings than most of their counterparts around the world. L’chaim!

israel celebrates. Photo by Hadas Parush, flash 90

When the Jewish National Council declared the establishment of the State of Israel at midnight on Friday, 5 Iyar 5708, quite a few people shrugged their shoulders and wrote it off. After all, the survival of 650,000 Jews with no political experience in the heart of a hostile Middle East was in no way obvious.

Nevertheless, the tiny young State exceeded all expectations. American President Harry Truman, who recognized the state minutes after it was declared, may have wished it well and believed in it, but neither Truman, nor his counterparts, and certainly not the Arab leaders who invaded on the morrow of the declaration could conceive what would happen here in less than a century.

So in honor of Independence Day, we offer a few encouraging details on this wonderful Israeli miracle.

Strong Demographically

Since the inception of Zionism, a major goal of the Jewish National Project has been to create a solid Jewish majority in the Land of Israel. This vision has been realized beyond all expectations. From a handful of a few tens of thousands at the start of the process, the Jews in the Land of Israel numbered over half a million on the eve of the State’s establishment, and today’s Jewish population is more than ten times that: more than six million Jews, a robust 75% of the state’s citizens.

And there’s more:

Aliyah is peaking: In 2015, aliyah reached its highest levels in a decade, with over 30,000 new immigrants from France, Ukraine, America, and elsewhere coming to Israel. Over the past ten years, an average of 20,000 olim arrive each year. That’s an infusion of 200,000 in a decade, in addition to natural growth.

Emigration is at a low point: Israel’s situation seems to be improving also in terms of emigration. As opposed to the beginning of the 2000s, when an average of about 20,000 Israelis emigrated annually, updated numbers put present rates at about 7,000 (after accounting for returnees). This is a particularly low balance by international comparison—less than one per thousand. That is significantly less than the OECD average or the average emigration average from countries like the US or Switzerland, whose rate is double that of Israel—or more.

High Birth Rate: Israel’s fertility rate is the highest in the Western world by a significant margin. While the OECD average stands at 1.7 births per woman, the average in Israel is over three births, with a closing gap between Jews and Arabs. According to current data from the Central Bureau of Statistics (CBS), until the 2000s the average fertility rate for Arab women was 4.3, as opposed to 2.6 for Jewish women. But in the past decade, those gaps have almost entirely been closed; in 2014, the average fertility of Arab women stood at 3.17 children as opposed to 3.11 children for Jewish women. Even according to the CBS’s conservative estimates, the Jewish majority looks likely to hold steady for the foreseeable future.

The high birth rate of Israelis ensures economic growth and vitality. Children are the most important human capital society has. When they grow up, they will help bear the national economic burden, and the more we have, the rosier the future looks. Children are a joy…. In Israel, children under age fifteen comprise 28% of the population, as opposed to just 18% among other OECD members. Individuals over the age of 65 comprise 10% of the population, in contrast to 16% in other countries in the OECD. Israel’s age pyramid therefore looks promising.

A Thriving Economy

When you examine Israeli economic data in international context, it is no wonder that aliyah is on the rise and emigration is plummeting.

High income: The Israeli economy is constantly improving. According to World Bank data, in 1990, Gross National Income per capita in Israel was $13,700. A decade later it was $22,690, and as of 2014, it has reached $33,300.

And if that’s not enough, when we go on to examine Gross domestic product per person employed in Israel, that number shoots up to $77,000 per capita—20th place according to the CIA’s database in 2011, and an incredible figure. Considering that principalities such as Liechtenstein, Luxembourg, and Brunei—which are not exactly states—are also at the top of the list, this means that Israel is close to the top of world income.

But what exactly does GDP per person employed measure? Very simple: people who work in Israel earn a lot more in comparison to most of the world. As opposed to the GNI index, which includes populations like Haredim and Arabs which, unfortunately, are not integrated into the economy, GDP per person employed only focuses on the working population. This better reflects per capita income in the State of Israel.

In addition, the very high GDP per person employed Israel gets an assist from two other positive data points:

First, unemployment in Israel is very low in comparison to the OECD. As opposed to 7.3% unemployment in Western countries, the unemployment rate in Israel stands at only 5.9%. The gap in Israel’s favor is especially positive among young people, with a 90% employment rate, as opposed to 85% in other OECD countries. Even the most severe form of unemployment—that which lasts more than a year—is particularly low in Israel: 0.5% as opposed to 2.5%.

Second, the tax burden in Israel is indeed heavy, but it is still low relative to the OECD. Whereas in most Western countries, aside from Switzerland and the United States, the total tax burden reaches c. 36% of a person’s income, in Israel that number is 31%. This means that Israelis make a lot on the one hand, and don’t pay particularly high taxes on the other (aside from freelancers and the top 10%, who pay far too much).

In other words, the Israeli economy is good at providing employment and compensating well for it. When Haredim and Arabs are integrated into the economy (only 45% of them work, as opposed to 80% in the general population), there is no doubt that the Israeli economy will soar.

New immigrants from USA and Canada. Photo by Yossi Zeliger, flash 90
New immigrants from USA and Canada. Photo by Yossi Zeliger, flash 90

High consumption: stable growth translates into a rise in the consumption and purchasing power of Israelis. Since 2000, Israelis have increased their consumption by 121% in conjunction with the growth of the economy. This means more flights abroad, more leisure, and more electronic and communications devices. In 2000, for instance, 20% of people had internet as opposed to 70% today, and less than 70% had a cellphone as opposed to 96% today.

If one looks further back, the trend is even more amazing. According to CBS data, only 37% of us had a refrigerator in the 1950s, as opposed to 99.9% today. 12% had a washing machine as opposed to 96% today, and as opposed to the 87% who now cool off with air conditioners, only 10% had them in the 1950s. By the way, in the 1950s, only 13% had a telephone line.

We still have a lot of hard work ahead of us, but it turns out that the State of Israel’s free market policy is developing and slowly adapting itself to Western standards. Thus, for instance, the Fraser Institute now ranks us as the 39th freest economy in the world—as opposed to 54th in 2000, and 99th in the 1980s. It’s still not enough, but we cannot ignore the positive trend.

Happy For A Reason

The young State of Israel has plenty of other impressive statistics in a variety of fields. Although there are people who want us to think otherwise, it turns out we just have it good here. Israelis are just happy with life. The world happiness index recently placed Israel at 11th. An internal CBS survey had 86% of Israelis saying they were satisfied with their lives, as opposed to 83% in the beginning of the 2000s. It’s therefore no surprise that according to a new report, Israel has the second lowest rate of suicide of all European countries.

Israelis’ happiness find expression in other impressive statistics as well. According to the data, Israeli life expectancy is 1.5 years higher than the average for the developed world: as opposed to an average of 80.5 years in the Western world, Israelis live 82.1 years on average and are ranked 7th overall. (It’s even higher for Israeli Jews: 85 years for women, and 81 for men). Another positive data point is out infant mortality rate (3 per mil), which is trending downward and is significantly lower than the OECD average of 4 per mil. In the Jewish population sector, that number drops to 2 per mil.

We could go on: the number of car accidents in Israel is low by international standards and is on a downward trend, with 3.4 killed per hundred thousand as opposed to 5.7 killed per hundred thousand in Western countries. Israel’s national debt is shrinking, and as opposed to an average debt of 115% of GDP in the west, the State of Israel’s debt stands at only 64.9% of GDP. The hi-tech sector is driving Israel forward, and its share of the GDP and employment rate is higher than in most Western countries. And so on and so forth from this wonder called the State of Israel.

The Caravan Goes On

No doubt, there is still a long road ahead of us: in culture, in economics, in defense. Our national challenges have not ended, and probably never will. But still, Independence Day is a great opportunity to sit back and feel satisfied and proud of what we have accomplished. The State of Israel has done the impossible in the 68 years of its existence. With very difficult starting points and unending obstacles, Israelis have managed to build a model society: a society that grants the long-suffering Jewish people cultural prosperity, a thriving economy, and damn it—the strongest army in the Middle East. L’Chayim!

“Though the storm howls all around us”

And hardship and pain abound

There’s still reason to rejoice:

We have plenty of courage and strength.

And the caravan goes on…

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