Sectoral parties hurt their own constituencies, economists insist

"If you want to deal with poverty in Israel, you have to get to the roots of the problem - the fact that the poorest populations don't work."

By HAVIV RETTIG GUR
dan ben david 88 224 (photo credit: Ariel Jerozolimski)
dan ben david 88 224
(photo credit: Ariel Jerozolimski)
The sectoral political parties responsible for the failure of coalition negotiations this week, particularly Shas and the Gil Pensioners Party, served their constituencies poorly by failing to treat the root causes of poverty, economists Dan Ben-David and Manuel Trachtenberg said. Shas announced on Friday it would not join a Livni-led coalition because she had refused to budge on their demands for dramatic increases in welfare benefits or to guarantee that east Jerusalem would not be on the negotiating table with the Palestinians. The Pensioners and the haredi Degel Hatorah (half of United Torah Judaism), too, held out for more subsidies for their constituents, in the end leading Livni to cancel the negotiations and call for general elections. But in demanding subsidies for haredi education and to allow a majority of the haredi population not to work, these parties have in fact done enormous damage to the prospects of their community dragging itself above the poverty line, said Ben-David, a Tel Aviv University economist. Through the haredi education system, which replaces most secular topics such as math and English with religious study, haredi parties "prevent their constituency from getting the toolbox they need for functioning in a Western society, perpetuating their poverty," he said. "Older Shas voters probably learned in state religious schools and got some [modern] education. They generally served their country in the army. They were part of a normal functioning populace. But they are now creating a generation that will have its future systematically destroyed. Their children are not getting the opportunity to live in a modern society," Ben-David said. The welfare subsidies "are the other side of the same coin," he said. "If you don't give people tools to function in a modern society, you have to give them a safety net." But this net will become a "vicious whirlpool," he said. "Their birthrates means the welfare strategy is unsustainable. It must collapse in a generation. Will you then cut the subsidies, throwing them out in the street? They don't have the education to survive there. Their representatives are creating a problem their constituents won't be able to get out of, and as a country we could find ourselves in a hole we won't be able to recover from. A happy ending is not guaranteed here." Trachtenberg agrees. "If you want to deal with poverty in Israel, you have to get to the roots of the problem - first of all, the fact that the poorest populations don't work," he said. "That's a fact that must be faced. And it isn't only haredim. The vast majority of Arab women also don't work." Trachtenberg blames "both societal obstacles within Arab and haredi society, and prejudice from the outside" for the astonishing rates of nonemployment. If these populations were working, he said, the state could dramatically increase funds for "the relatively small populations that genuinely cannot work." The demands heard from sectoral parties during the coalition negotiations showed that these parties "don't see the big picture or aren't willing to tackle the problems from their roots. Just transferring public funds as welfare grants doesn't serve the goal of reducing poverty," Trachtenberg said. Both economists have had connections to Kadima, but remain professionally unconnected. Ben-David recently turned down a Kadima Knesset slot to head a prestigious economic think tank in Jerusalem, the Taub Center for Social Research. Trachtenberg is the chairman of the National Economics Council, which advises the prime minister on economic issues. Both are in the top-10 list of most-cited Israeli economists. A representative of Shas chairman Eli Yishai said in response to the criticism that "the claim is imprecise at best, demagogic and dishonest at worst. Most of the people living under the poverty line are working people." According to the representative, Yishai, who is minister of trade, industry and labor, "has said the entire time that it's not just about welfare; we must also talk about employment. But when you have families that can't feed themselves, you have to have enough welfare for them to get by. The minister also sees the coming financial storm and wants to help poor families to weather it." But for Ben-David, changing the conversation from the haredim, where a majority are not working, to the general population, where most poor are indeed working poor, "is itself dishonest." Among haredim, three out of four men and one in every two women of prime working age (25 to 54) are not employed. "That's not 'unemployed,' which means they are looking for work. The figure for 'not employed' includes a minority who are unemployed and a majority who are not even looking for work," he said. For the general population, the problem is education. "If the majority of Israel's poor are working, then they lack the education and tools to make more money or change jobs," Ben-David said. A representative of Pensioners Party chairman Rafi Eitan said the party would welcome economic reform proposals, "but the Pensioners Party is a sectoral party that has to take care of the pensioners. You expect us to tackle haredi education? Nobody knows how you get haredi men or Arab women to work." The Pensioners Party would support such an initiative, however, if it were brought to the Knesset floor. "It's true that people from those communities need to go to work, but someone else has to push this through. The Likud or the other large parties can create a responsible budget and we'll support it. But, of course, that's not likely to happen before the Messiah comes. Already [Likud chairman Binyamin] Netanyahu is offering Shas subsidies in exchange for their support in his bid for power," the Pensioners Party representative said.