BOI sees rapid rise in haredi employment

Steady rise strengthens the bank’s assessment that a genuine change has taken place.

Haredi family 521 (photo credit: Marc Israel Sellem)
Haredi family 521
(photo credit: Marc Israel Sellem)
Employment has jumped in the past two years among haredi men, a key target in the government’s drive to increase labor participation and fight poverty.
The employment rate among the group rose to 45.6 percent in 2011 from 38.7% in 2009, the central bank said in an excerpt from its annual report sent by email Tuesday. The full report will be published at the end of March.
Most of the increase came in the business sector and not from government or religious jobs, it said.
That the employment rate has remained high over a period of two years – in contrast to the temporary rise in 2006 – strengthens the bank’s assessment that a genuine change has taken place, the report said. The rapid increase in employment in the business sector, excluding religiously oriented industries, indicates that the participation of haredi men in general economic activity is on the rise, it said.
However, the bank conceded that it was unable to evaluate to what extent these changes were caused by a general increase in demand for labor, by government employment policy toward the haredi community, or by the Tal Law, which gave military exemptions to men who choose to study Torah full-time. The Tal Law was passed by the Knesset in 2002 and canceled by the High Court of Justice this year last month.
Despite the rapid increase in the employment rate of haredi men, their participation in the business sector is still relatively low compared to other Jews, the report said. Haredi employees work fewer hours than other Jews, which reduces their wages and makes it more difficult to lift their households above the poverty line, it said.
Bank of Israel Governor Stanley Fischer has said the low level of labor participation among haredi men is not sustainable and could hurt the country’s future prosperity. The government has set a target of 63% employment among the community by 2020.
The government has been trying to push haredi men to enter the workforce by cutting child allowances, funding academic study programs for the religious and making special arrangements for army service. It has also been trying to increase the number of working Arab-Israeli women.
The country’s long-run stability will “remain in question” unless the low participation level among haredi men and Arab-Israeli women is addressed, the International Monetary Fund said in a February 13 report. It noted that severe poverty is concentrated in these two groups and called on the government to tie social benefits, such as child care, to employment.
While haredim account for 8% to 10% of the population, their share of the main working-age population is expected to rise to 17% in about 20 years because of their higher birth rate, the Bank of Israel said.
The employment rate among non-haredi males was 81.4% in 2011, the central bank said.

Bloomberg contributed to this report.