Facing Mounting Economic Insecurity, Israel’s Gen Y at a Political Crossroads

“The class struggle in Israel is beginning to take on the characteristics of a war between generations,” says Professor Danny Gutwein, a socio-economic historian at the University of Haifa. “Under the current economic situation, the solutions that are available are Darwinian, and people benefit only at the expense of one another.” 

In Israel today, there are about 135,000 unemployed people between the ages of 18 and 34. That age bracket makes up around 40% of all unemployed people in the country, according to a recent poll by the Central Bureau of Statistics. Most of them are looking for work and have yet to find any. Unemployment in Israel has been high for many years, and young people are all too familiar with the situation. 

Davar sat down with Prof. Gutwein to understand his generational analysis of Israel’s Generation Y, their economic insecurity within the disintegration of Israel’s welfare state, and where all this could lead politically. 

“Youth unemployment is part of a general trend in Israeli society,” says Gutwein. “Another trend is the medical interns’ struggle [against 26-hour shifts], which is essentially a generational struggle [of young interns against their older employers].

“And the last one, possibly even the most pressing issue, is the current struggle for raising the salaries of Israel’s active-duty soldiers. The government has not provided a salary raise for its young soldiers, while at the same time raising the pensions for its chiefs of staff. It is a hot-topic issue attracting a lot of discourse right now. 

“If you look at the generational aspect of these three examples of employment struggles, you begin to identify an important trend. The social protests in 2011 that focused on young people struggling to find housing, have spread to additional areas such as the labor market and unemployment.”

Prof. Danny Gutwein: "The generational tension that is beginning to form in Israel shows how we are internalizing the abolition of the welfare state." (Photo: Haifa University spokesperson)

Why is unemployment becoming a generational struggle?

“In order to survive in a Darwinian society, young people are pitted against the elderly. The older generation is perceived as a problem. The solution is never seen as simply providing benefits to young people, but rather is always understood to be at the expense of someone else. The generational discourse in Israel, which takes place within a neoliberal context, immediately takes the form of a struggle between the generations.”

Some say that this is a spoiled generation.

“And that label only adds to the generational picture of the millennials in the view of the older generation. 

“A welfare state can eliminate generational tension. The idea is to take care of every citizen from the cradle to grave. The generational tension that is beginning to form in Israel shows how we are internalizing the abolition of the welfare state.

“The destruction of the welfare state in Israel creates a zero sum reality. This phenomenon is the greatest weapon of the right-wing, because it allows different populations to act at each others’ expense, and it prevents us from doing the simplest thing: to take care of everyone.”

So the young generation is no more spoiled than the older generation? 

“What seems ‘spoiled’ to the older generation, is actually just a reflection of the laws of a different economy. Generation Y has never really experienced the welfare state. They have only lived in continuous survival mode.

“If I can be fired in five minutes, then I can quit in five minutes. If I have no job security, then I don’t owe anything to anyone. If I do not owe anyone anything in the workplace, then that goes for other places as well. That generation is a perfect product of our new liberal economy.

“Generation X, who are now ages 60 and older, grew up with more [economic and social] security. My generation grew up knowing that you go to the army, then study or work. There was an order to things, and in the end something would work out. It did matter where you came from. There were communities with more and less opportunity, but by and large that was the ‘arrangement’ in Israeli society.”

“They spend everything they earn”

The older generation is frustrated that the younger generation is not saving money. 

“Neo-liberalism has created a generation that lives in constant insecurity. All the talk of the so-called ‘indulgence’ of Generation Y is actually just neoliberalism’s inability to deal with its own contradictions. If you pay low wages and if there is no job security, then people will not buy anything. This is a problem at the economic level. 

“The current economy is designed for constant spending and zero saving. The culture produced by this pattern of consumerism is one in which people generally have less job security, yet need to spend everything they earn in order to survive. It puts the younger generations in a position where there is barely money, if any, to set aside and save.

“Insecurity leads to people renting, not buying. There’s a constant need to consume new products and fashion, a trend that’s constantly being encouraged. If you live your life in the moment, you have to spend money constantly.

“What is called ‘indulgence’ in the eyes of the previous generation is the neoliberal logic that has created, on the one hand, employment and economic security, and on the other hand, extorts all of people’s earnings, and by doing so perpetuates the paradigm.”

The established generation tells the younger generation to save, not to participate in rampant consumerism.

“Yet in our society, external appearances are highly valued. If you look out of date, it will reduce your chances of advancing. If you are not dressed the right way, no one will look at you, because you will not look like you belong. And to be seen as belonging, you must constantly update yourself. I see this as an economic mechanism by which the culture depletes your income.

“Young people today aren’t talking about fighting for their pensions. It’s seen as an issue for the elderly. Although essentially it is an issue for young people as well, since they are the ones who won’t be guaranteed a pension when they’re older. That is exactly how this mechanism works.”

“We are seeing complete erosion of future planning”

Is this culture present in countries that have a more robust welfare state?

“In other countries, people know they can rely on certain things from the state, like public education, public housing, and pensions. In Israel it’s different. We are seeing a complete erosion of future planning, even planning for tomorrow. The young generation understands that those who came before them are not going to leave anything behind [the way it happened for the older generation].”

Are there similar phenomena in other places?

“In the United States, the same phenomena is reflected in university tuition. Students there take out huge loans and pay them off over the course of many years. In the past, people could pay off their loans relatively easily once they started working. Today, students are finishing college and unable to pay back the loans. Tuition is rising while wages are either stagnant or falling. The gap has become impossible to bridge.

“According to the late anthropologist David Graeber, an important researcher and social commentator in the United States, this generational element was highly influential in the Occupy Wall Street protest movement that happened over a decade ago in New York City’s financial district. It was a protest that was organized and run completely by young people. This generational element is  also a major component  of Bernie Sanders’ rise to popularity in American politics.

“Sanders has taken the generational distress and turned it into an element of his social-democratic economic plan. This is in stark contrast to what is happening in Israel. Here the generational element is becoming a Darwinian struggle. Sanders drew on the power of these young people, and integrated it into a much broader course-correction of the American welfare state – from minimum wage to pensions. Sanders offered young people an alternative: instead of a war for survival, they could change the existing order.”

And young people voted for him?

“Yes. Young college graduates supported him in huge numbers.”

The older generation, who have a pension and some of whom own real estate investments, are actually the parents of those young people who can’t find work and pay a fortune on rent. This creates tensions within families. On the other hand, parents provide their children with a safety net.

“The fact that children can return home to their parents is not a safety net. Does a 30-year-old man really want to go live with his parents? I would not define that as a safety net. It's more of a trap. You can say he gets rent and food, etc., that’s true. But is it life? Is that what you want?”

Is this phenomenon more true for the upper class?

“The parents who have a higher socioeconomic status tend to help their children more. But this trend is happening across all classes.”

“This sense of despair and hopelessness has political potential” 

Gutwein has a name for the overlap between the two sectors of young people, and those with vulnerable economic standing – the Precariat, a combination of precarious and proletariat. The Precariat was a concept that entered the consciousness of the worldwide social protests in 2011, with the publication of the British economist Guy Standing’s book The Precariat: The New Dangerous Class. Standing wrote about the vulnerable generation of workers, which made headlines, among other things, after the global economic crisis of 2008.

“In the theory of the precariat, we are talking about a dramatic change in the social world,” Gutwein explains. “The working class as it once existed, with pensions and job security, is collapsing.

“The breakdown of the world of work, economic perceptions and culture create a new world called the precariat. The young people in Israel are becoming the precariat. They are an endangered class, they take risks, and they see the adults and don’t like them. It could easily turn into Trumpism, and it could easily have become Le Pen in France. But it could also become Sanders and Biden in the United States.

“This sense of despair and hopelessness has political potential – populist, fascist, or social democratic. Everywhere in the world it takes a different form, and depends on the political forces operating in it. In Israel, the left-wing parties have a huge blindspot when it comes to this, and that is very dangerous.”

How do you define the precariat?

“The precariat is multi-generational. Truck drivers who do not know where they will be working tomorrow are part of the precariat. But in principle there is an overlap between the precariat and those 40% young unemployed people up to the age of 34. It’s all those people who deliver food by bicycle in the mornings, and in the evenings work as waiters making pennies. They know that in the end they will retire, but they do not know what they will have to live on, because no one knows what the stock market will do.”

And will this sector change the political systems in the coming years?

“There is a generation here that is dissatisfied, and that could translate into political action. Unemployment is a very fertile field for systemic change. The economic right-wing in Israel translates unemployment into hostility toward the welfare state, labor unions, and pensions. The problem is, the left-wing parties do nothing about it.”

“There is a huge danger in the blindness of the left”

Meretz and Labor are part of a coalition government currently promoting a conservative budget and neoliberal reforms.

“The fact that the parties in Israel, which are committed in one way or another to some kind of social democratic agenda, do not offer any alternative, is dangerous. It makes people feel there is no way out.

“You can talk about soldiers’ salaries, but there is no voice that saying that we also need to put money into the national pension fund, and we also need to invest in young people. We need to expand our budget, or offer a basic income. 

“The whole development of the new coalition in the Knesset is very neoliberal. [Finance Minister] Lieberman abolished unemployment benefits. It’s dramatic. This created a lot of insecurity. It is debatable whether or not there was a need for a mechanism for unemployment benefits, but it is quite clear that leaving people without any job security is a bad solution. 8% of the unemployed in Israel say that there are not enough jobs. The government does not offer good jobs to young people.

“The fact is that the government, and the social-democratic leftist parties within it, are leading a policy of economic insecurity. That is blindness. The government is acting in a dramatic way led by Lieberman, that is clear, but there is a blindness of the leftist parties to the clash between the older and the younger generations.

“Leftist parties do not know what they can offer to young people. Young people can go right-wing, deep right, out of disgust with the whole system. Or they can go in the direction of total change, like in the United States. Leftist parties today are pushing young people to the populist right, because they are not offering any alternative.”

Why is the left just trying to reduce the damage, rather than offering a coherent alternative to the current economic policy?

“Because the left is afraid of hurting its voters. That is also generational. Labor and Meretz voters are older and more established. As a result, the left-wing parties are acting against the young.

“Sanders politicized how people felt. People also have feelings in Israel. But here, no one knows how to turn that into a political plan. Sanders is pushing the Democratic Party in the United States to where Biden is now, in the direction of social democracy. Biden also brings his own ideas of course, but he can do it thanks to Sanders. He supports economic equality, strengthening the working people, and growth through organized labor.

“This is what all the left-wing parties in the world do. In Israel, the left does not do that and is lagging behind. The right knows how to exploit the state of instability and channel it to meet its goals. There is a huge danger in the blindness of the left.”

Have there been situations in the past that are similar to what’s going on today?

“The Revolution of 1977 [when the Likud party first came to power in Israel], was also a revolution of young people. The young people born in Israel did not vote for the Labor party. Begin [of the Likud party] received a lot of votes from people from the Mizrahi community and from young people born in Israel.”

Why?

“For the same reason. The recession hit people who had to enter the job market. Labor did not give them an answer, and the upheaval in 1977 broke down along generational lines.”