Last week, Tadiran announced its intention to move its manufacturing out of Israel to China or somewhere else in the Far East. The days of cheap labor in Israel are officially over.
Companies are looking for methods to survive the economic downturn and the laws that are on the books and the ones that have been proposed make it hard for companies to justify continuing to have labor intensive jobs done in Israel.
The local goverment and the cheap labor markets have made the decision easy for any manager.
So, what can be done?
The Knesset, first, needs to admit that there is a problem. Until that happens, there will be no resolution.
Once that takes place, the government can give tax breaks to companies that bring jobs back to the local market, like the repatriation tax break that was passed in 2004. This may jumpstart the local job market, by increasing the amount of jobs that are available today. A company may now see some cost benefit, due to the tax incentive.
The Ministry of Trade and Industry can start a "Buy Blue and White" campaign to promote goods that are made by local labor to Israelis.
The government can pass incentives or law to only allow government procurement from Blue and White companies.
Would you buy Blue and White, even if it costs a little bit more?
Let me know your answer and any other ideas you have of how to insource more jobs to Israel.
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