Report: Productivity On Long-Term Slide

The Israeli worker has been lagging behind his counterpart in the developed Western countries for decades, with the problem getting worse rather than better.

Since 1970, the gap between Israel and the G7 (Canada, France, Germany, Italy, Japan, the UK and U.S.) has steadily widened, according to “The State of the Nation Report 2013,” which the Taub Center for Policy Studies releases soon officially.

Productivity is defined as the ratio between the value that an employee produces and the cost of his salary.

The Israeli worker’s average productivity is $33.70, less than in most OECD member states; Israel is ranked 26th out of the OECD’s 34 members. Even countries with severe economic difficulties, such as Greece and Italy, have higher productivity than Israel.

Taub Center executive director Dan Ben-David says, “What was surprising in the sharp drop in productivity in 2012 was not the drop itself, since it was apparently mainly due to a correction by the Central Bureau of Statistics, which resulted in more accurate labor data, but the fact that Israel’s productivity was even lower than the previously very low figures.”

“This has very serious long-term consequences. At a time when there are Israelis who will continue to live in the country come what may, others take economics into account. As the gap between possible income abroad and income in Israel widens, more and more Israeli families will decide to leave,” explains Ben-David.

“It is no coincidence that the brain drain of university graduates from Israel to the U.S. is more than six times the rate of the brain drain from European countries to the U.S., and these data are not unique in the world.”

This article appeared in print on page 41 of the September 3rd, 2013 edition of Hamodia.