(photo credit: REUTERS/BAZ RATNER)
The rapidly growing, self-segregated haredi community has been identified by number of leading economists as a major drag on Israel’s economy.
Former Bank of Israel governor Stanley Fischer warned that in the long run, Israel would be unable to sustain such a large and poor population. Present Governor Karnit Flug articulated similar warnings, as did the OECD in a recent report on Israel.
The basic argument goes something like this: Since most ultra-Orthodox men devote themselves to Torah scholarship instead of working, most haredi families are poor. As long as haredim were a small fraction of the population, their burden on working, taxpaying Israelis was manageable. But with fertility rates of around six children per haredi mother, the haredi community, which presently makes up about 10 percent of Israelis, will within a few decades grow to around 25 percent of the population. Even the most dynamic economy would be unable to sustain so many poor people who are ideologically opposed to educating their young men to work.
Recent data released by the Central Bureau of Statistics, however, give some reason for optimism. For the first time since 1995, when the CBS began tracking the haredi community, there are more haredi men in the labor market than in yeshiva.
At the end of 2015, among males aged 25 to 64 who identified as haredi, more than half said they were working or looking for a job. Researchers at the Israel Democracy Institute such as Dr. Gilad Malach are hailing the new figures on haredi males’ employment rates as nothing less than “historic.”
A number of factors have come together to bring about the gradual change that is taking place. Deep cuts in welfare transfer payments beginning in 2003 are part of the answer. In 2002, before the cuts were instituted, just 33 percent of haredi men participated in the labor market. But as state aid to haredi families and educational institutions was drastically reduced, more haredi men (and women) began looking for work.
An additional blow to the haredi community in Israel was the economic crisis in the US precipitated by the subprime meltdown of 2008. Donations to haredi institutions dropped. Fund-raising campaigns flopped.
As these “push” factors forced many ultra-Orthodox families to reconsider their priorities, “pull” factors such as occupational tracks for haredim were established to help men and women prepare themselves for careers. Changes to IDF enlistment policies have relieved many haredi males of mandatory military service, opening up the way for them to enter the job market.
In parallel to these changes, there was a weakening of the haredi rabbinic leadership.
The gradual move from a society of Torah scholars to a more sustainable model has far reaching ramifications not just for haredi society. A growing haredi middle class made up of tens of thousands of households in which both men and women work will bring about a change in priorities. Economic stability will rank along with Torah scholarship as an important value. Pursuing a professional career will no longer be looked down upon as a betrayal of Torah values.
An upwardly mobile haredi middle class will introduce a new dynamic to the economy. The talents of thousands of young haredi men and women will be unshackled from the confines of a highly restricted, one-track society. Youthful energies held down for too long will be released, producing the effect of a spring compressed to the utmost that is finally liberated.
Israeli society will be relieved of the burden of supporting hundreds of thousands of haredim living in poverty. Haredi men and women will take pride in supporting their families with the fruits of their own labor. Non-haredi Israelis will no longer look down on haredim as freeloaders.
Labor market participation rates among haredi males are still low. We are, however, witnessing a gradual move toward the model that existed in Europe before the Holocaust in which the vast majority of families were headed by fathers and mothers who worked while full-time adult Torah scholarship was reserved for a small elite. This is good for the haredi community and good for the State of Israel.