Regev Responds

How to bring 21% of Haredi households out of poverty:

Finance Ministry Chief Economist: Haredi men must enter the workforce!

We turn back to addressing one of the key manifestations of the unholy link between religion and the economy. This time, it follows on the publication of a review by the Ministry of Finance's Chief Economist department, according to which increasing participation in the workforce among ultra-Orthodox Jews and Arabs will reduce the poverty level in Israel by 21%.


Every year, when the National Insurance Institute (Israel's Social Security Agency) publishes its annual poverty report, a public debate ensues as to the phenomenon of poverty altogether, particularly regarding the disproportionally high representation of ultra-Orthodox Jews and Arabs among those in poverty.

At the same time, the controversy rises as to the origins of poverty, and whether there is no need to distinguish between poverty resulting from discrimination in employment (as is often found with regard to employment of Arabs, and as claims are often made regarding racist-oriented discrimination against Jews, like Ethiopian Jews may face), and poverty that results voluntarily from poor families refraining from realizing their earning potential (such as the choice of most ultra-Orthodox men, particularly Ashkenazim, not to enter the workforce but rather to spend their years in yeshiva studies and rely upon public coffers for support). To this, one must add that the challenge of poverty is particularly high when it comes to these families because on the side of not seeking work, there is also the choice to give birth to many children in a way that further reduces family income per family member and causes increased poverty among children. Within this group of poor children, there is a high representation of ultra-Orthodox children. In this regard, there is a complex public debate as to the responsibility of parents to their children and their obligation to consider their ability to provide a respectable standard of living for their children when they decide to grow their families. To put this in context, it is necessary to mention that an average ultra-Orthodox family has ~6.5 children, compared to ~2.1 children in non-Haredi Jewish families (and ~3.6 children in an average Israeli Arab family).

It should also be stressed that in contrast to the governmental coalition policies, which surrenders without any compunction to the dictates of the ultra-Orthodox political parties and the whip raised over them by MK Rabbi Gafni who serves as the Chairman of the powerful Knesset Finance Committee - the overwhelming majority of the public, including those who voted for the non-Haredi political parties in the government wants to see linkage between one's realization of his/her earning potential and his/her entitlement to support from the taxpayer funds (we should stress, naturally, that "realizing one's earning potential" means seeking work and providing sustenance to the families of those who are capable of working and earning in a way makes possible the dedication of more public funds to those who are not capable of earning at all or not are able to earn sufficiently enough to cover their families' basic needs). According to the 2016 Israel Religion & State Index, 83% of the public holds that the government should give preference in receiving subsidies and benefits to those who work or attempt to work, as opposed to 17% who hold that no preference should be given. What also comes to mind is the public pronouncement of Minister Rabbi Litzman, head of the Agudath Israel party, claiming that who publicly declared that ultra-Orthodox women work - and therefore: why should ultra-Orthodox men work?

Also worth mentioning is that in the past, when Prime Minister Netanyahu served as Finance Minister in Ariel Sharon's cabinet, he took tried and true economic measures in confronting the economic crisis, and among other actions he drastically cut state funded child support. A review subsequently done by the Bank of Israel showed that seemingly against logic, that the cut in child support resulted in lower poverty in Israel's ultra-Orthodox sector. However, this sound economic logic that guided Netanyahu in the early 2000's during the Sharon the government does not guide him today as Prime Minister - dependent upon the mercy of the ultra-Orthodox political parties.

The recent review done by the Finance Ministry further demonstrates how much the poverty levels in ultra-Orthodox society are indeed the result of voluntary choice (of course, this is not a fully autonomous choice because the members of ultra-Orthodox society are under massive ongoing pressure by their rabbinic leaders from cradle to the grave for men to opt for yeshiva studies, rather than seek employment. We should also underscore the refusal of the political and religious ultra-Orthodox to allow for the incorporation of core curricular studies - math, science, English - in ultra-Orthodox, state funded boys' schools. This makes extremely difficult for the graduates to seek employment and find higher paying jobs even when some of them try to integrate into the workforce.) While the scope of employment of non-Haredi Jewish men in 2015 was 72.4% the scope of employment of ultra-Orthodox men that same year reach 45.2%. While ultra-Orthodox male employment gradually rose in the following year to 47.6% due, in part, to the cuts in state subsidies imposed by the previous government that did excluded the ultra-Orthodox political parties, it fell back to 45.3% in the first quarter of 2017 now that all these cuts have been undone, and more funding than ever before has been pouring out to the yeshiva students and families per the demands of the ultra-Orthodox political parties in exchange for their support of Netanyahu's government.

The irony cannot be escaped - the government boasts of spending hundreds of millions in encouraging ultra-Orthodox men to enter the workforce, but its subsidies undermine that very high priority national interest, turning it into a mockery.

The irony cannot be escaped - the government boasts of spending hundreds of millions in encouraging ultra-Orthodox men to enter the workforce, but its subsidies undermine that very high priority national interest, turning it into a mockery. Moreover, according to Finance Ministry data if the ultra-Orthodox employment would equal that of the market as a whole, 21% of the poor ultra-Orthodox households would cease being classified as such! (and 54% of Arab households that are classified as poor would no longer be so.)

We should also bear in mind that this low rate of ultra-Orthodox male employment is also misleading because whereas 87.1% of non-Haredi Jewish males of working age (25-64 years old) in 2015 worked full-time and 12.9% worked part-time, only 60.7% of ultra-Orthodox males worked full-time and 39.3% worked part-time. Among those who worked, 42% worked in public communal frameworks, such as education, welfare, and administration, whereas of only 10% worked in professions such as high tech, communications, scientific and technical services, insurance, legal services, and accounting. 19% worked in commerce, and 21% in blue collar positions.

Reading these data and realizing the inherent national and political conclusions that result from them, as to taking steps for assertive encouragement of increased participation or integration of these minority groups in the work force (by way of greater investment in improved education and the enforcement of core curricular studies and requiring the realization of one's earning potential as a condition for receiving state support, and addressing discrimination in employment in general and in particular with discrimination rooted in race, religion, or sex) - becomes even further urgent and acute than it was in the past, in light of the new demographic data published Israel's Central Bureau of Statistics. The CBS recently published its demographic projections through the year 2065, according to which, while the share of the Arab population among the general population is not expected to change significantly, and the limited change anticipated is in the direction of reduction (from 21% today to 19% in 2065), the share of the ultra-Orthodox population is projected to grow from 11% of the general population in 2015 to 20% in 2040 and 32% in 2065. One cannot over-exaggerate the importance and impact of this projection on the future of the Israeli economy. The share of the working age Jewish population (25-64) in 2015 amounted to 81.2%, including 7.5% ultra-Orthodox. In the year 2065, a sharp increase in the share of working age ultra-Orthodox Jews reaching 26% is projected!

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