Business Week: Israeli Schools Declare Bankruptcy

Metaphorically speaking, Business Week reports that Israeli schools have declared bankruptcy... and this is indeed a potential crisis for the Jewish State.

The Crisis in Israel's Classrooms
A breakdown in the financially strapped school system is jeopardizing the country's high-tech edge

It sounds like a teenager's dream: Sleep late, hang out at the mall, and go to the beach. Yet 15-year-old Barak Rivkind is sick of that easy life. At noon on a school day, instead of sitting in class, Rivkind and his buddies are sipping milk shakes at the Aroma café in Jerusalem's Malha Mall. That's because Israel's high school teachers have been on strike since Oct. 9 seeking higher wages and improved working conditions. "I've had enough of loafing," says the 10th grader. "We're missing a lot of material, and it will be very difficult to make it up."

Israeli education is in crisis—and many fear the country's tech industry will suffer unless something is done to fix it. The technology sector represents 12% of Israel's gross domestic product and more than a third of all exports, and has been growing at a double-digit clip for most of the past two decades. Fueling that boom have been Israel's top-notch schools. "Unless the government wakes up, Israel will quickly lose its edge in high tech," says Giora Yaron, a serial entrepreneur who has sold two companies to Cisco Systems (CSCO ) and is now involved in four other tech ventures.

The teachers' strike and a parallel action by university professors are just symptoms of the malaise gripping the country's school system. In the 1960s, Israeli students topped international rankings of math and science skills. The last time Israel participated in such a survey, in 2002, it had slipped to 33rd out of 41 countries, behind the likes of Thailand and Romania. And just 30% of 18-year-old native-born conscripts to the Israel Defense Forces in 2005 passed a standard Hebrew reading comprehension test, down from 60% two decades ago. "Our most important resource is brain power, and if we don't foster this then our society is at risk," warns Aaron Ciechanover, the 2004 Nobel laureate in chemistry and a professor at the Technion Israel Institute of Technology in Haifa, Israel's equivalent of MIT.

The government, though, has been slow to act. National spending on education dropped from 9.3% of GDP in 2002 to 8.3% last year. The 2008 budget includes a $400 million increase for education, to $10 billion—though that's barely enough to keep up with the economy's growth rate. The extra money will be used to increase teachers' salaries, and the government has committed to an additional $2 billion over the next five years to boost wages, renovate and repair schools, and keep them open longer each day.

Many Israelis say the education system needs a complete overhaul. Class sizes average 38 to 40 students, and the Organization for Economic Cooperation & Development says teachers' wages in Israel are the lowest in the industrialized world, with starting educators earning just $600 per month—less than the rent on a modest one-bedroom apartment in Tel Aviv. That makes it tough to attract quality professionals. "The level of teaching at our school is lousy, and the principal has no authority to do anything about it," says Asaf Makover, a 10th grader at Jerusalem's Beit-Chinuch High School. Teachers grouse that it's nearly impossible to get anything done. "With 40 kids in a class, you spend most of your time just keeping order and very little time on actual teaching," says Meirav Cohen, a geography instructor at a suburban Jerusalem junior high.

The crisis has parents scrambling to fill the gaps, hiring private tutors to help children after school. Bulletin boards in schools are crammed with ads from teachers and university students offering after-hours tutoring. "It's the only way to make ends meet on such a meager salary," says a teacher at a Jerusalem high school. Many parents in the mid-'90s banded together to create nonprofit programs to tutor kids. Now such classes have spread to 50 towns.

The biggest problems are in math, science, and English. In each of these subjects, potential teaching candidates can usually find high-paying alternatives in the tech sector. "After six years of teaching, the crowded classrooms and the discipline problems got to me," says Laly Bar-Ilan, an algorithm engineer at WhiteSmoke, a Tel Aviv startup that developed a software program for improving English grammar and writing style. She now makes four times what she did teaching computer science and English. "The only way to bring back teachers is to pay competitive salaries and improve work conditions," she says.

With such a shortage of qualified candidates, Israel has dropped its standards. In the past, high school teachers needed a university degree in math or science to teach in those fields, but nowadays a degree from a less rigorous teachers' college will suffice. And budget cuts have led to shorter school days. In 1997 students were in school for 36 hours weekly, but today it's just 30. "With fewer hours and most kids finished by 1 p.m., some subjects have been dropped or are hardly taught at all," complains Dan Ben-David, a Tel Aviv University economist with three children in the school system. Even core subjects such as math and science have been cut back.

At Israel's seven universities, funding has dropped 20% in four years. So even as the student population has climbed 50% since 1997, the number of teachers has remained steady at about 5,000. And as many as 3,000 university lecturers have decamped for jobs overseas. "We're seeing a serious brain drain," says Zehev Tadmor, chairman of the Samuel Neaman Institute, a Haifa-based think tank, and former president of Technion. "Hundreds of professors [are] teaching at leading institutions abroad because we can't offer them jobs."
--By Neal Sandler

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