Knesset Committee meets to discuss integration of Haredim in workplace
When Will Israeli Haredi Men Participate in the Workforce?
This week, the Committee for Special National Infrastructure Initiatives and Jewish Religious Services, chaired by MK Yulia Malinowsky (Yisrael Beitenu) met to discuss the integration of the ultra-Orthodox population in the Israeli workplace.
Uri Regev 16/06/2022 21:36
Tags: Knesset · Yisrael Beiteinu · Haredim · Workforce · Employment
Knesset committee discussion (photo credit: Danny Shem Tov, Knesset spokesman)
In preparation for the meeting, a special report was prepared by the Knesset Research and Information Center, which presented an overview of the issue. The importance of the report is easily understood from the following figures, which are based on the high birth rate in ultra-Orthodox society: the percentage of ultra-Orthodox in the Israeli labor force today is about 8% and according to forecasts, it is expected to reach 26% by 2065. As of the end of the first quarter of 2022, only about half of ultra-Orthodox men are employed, and most of them work part-time and in limited areas of employment. The percentage of ultra-Orthodox men working is lower than the employment targets which were set by the Government in August 2021, according to which the target employment rate of ultra-Orthodox men aged 25-66 would be 65% by 2030, increasing to 70% if the age of their exemption from military service was reduced.
On the other hand, among ultra-Orthodox women, the employment rate is about 81%, similar to the general employment rate of Jewish women in Israel.
A representative from the Israeli High-Tech Union at the Manufacturers' Association said at the hearing: "We are doing a lot to promote the integration of the ultra-Orthodox population in industry in general and in the high-tech industry in particular ... however ’you need two to tango’ and we are eager to absorb them. We appeal to the ultra-Orthodox sector to participate in various employment fairs, but we encounter an extremely limited response."
According to a study conducted at the Bank of Israel, only 4% of ultra-Orthodox men who wish to work are unable to integrate into the workforce. Eyal Argov, from the Research Division of the Bank of Israel emphasized in the discussion: "The figures of ultra-Orthodox participation in the work force is low because they do not have much desire to work. Forty years from now the ultra-Orthodox population will be a quarter of Israel's population. If the employment rate of ultra-Orthodox men is identical to that of the general sector, the per capita GDP in the State of Israel will increase by NIS 13,000…”
A representative from the Ministry of Economy and Industry announced at the hearing that "there are more than 140,000 vacancies in the market and the ultra-Orthodox sector can provide an immediate solution to this."
A representative from the Ministry of Economy and Industry announced at the hearing that "there are more than 140,000 vacancies in the market and the ultra-Orthodox sector can provide an immediate solution to this."
The chair of the committee summed up this important discussion, remarking that “the integration of the ultra-Orthodox population into the work force is an important national, economic, and social mission. The absence of the ultra-Orthodox from the work force is causing the country a loss of GDP and a huge loss of income. The integration of the ultra-Orthodox is also important for strengthening social solidarity and reducing the rifts in Israeli society.”
The issues that arose in the Knesset hearing should be seen within the context of past analyzes and warnings from senior economists. We wrote about this, for example, following the speech of the Governor of the Bank of Israel in 2020 in which he estimated that the ultra-Orthodox parties’ refusal to enable the full integration of ultra-Orthodox men into the job market and include core curricular studies in their school curricula, would require raising taxes from the rest of the public: "Direct tax payments by ultra-Orthodox households are about one-third those of other households. If the demographic trends are maintained and ultra-Orthodox participation in the labor market remains as it is today, maintaining tax revenues as a share of GDP will require a 16 percent increase in direct taxes in 2018 terms...”
"The wage gaps among men are due to both the low number of work hours and to earning capacity—gaps that have widened over the years. The gap in earning capacity can be explained by the differences in various qualities of the employee: education, employment duration, and basic skills. These gaps begin with scholastic achievements, and are reflected in employee skills, particularly among younger employees. Later, the gaps are reflected in low enrollment rates and remarkably high drop-out rates in higher education. These are all reflected in low skills in the labor market, and in relatively low wages among ultra-Orthodox workers...”
"... The integration and advancement of the ultra-Orthodox community in the Israeli economy are especially important to the continued growth and prosperity of the Israeli economy..."