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Israel's Ultra-Orthodox Community: A Forced But Inevitable Process of Transformation

A funny thing happened in the Knesset last week: Lawmakers approved in a preliminary vote a bill submitted by Moshe Gafni, the leader of the United Torah Judaism party, that would require public sector employers to hire a fixed quota of ultra-Orthodox workers.

The funny part is that Haredi leaders have for years done everything they can to deter their followers – at least the men – from finding gainful employment. In the “society of learners” that has grown and developed since the 1980s, the ideal for adult men is to study Talmud as late into life as possible.

The result is that the percentage of adult male Haredim in the Israeli workforce was just 51 percent in 2021, compared with 86 percent for non-Haredi men. One serious consequence of the ideal of Torah study is to consign the ultra-Orthodox community in Israel to extraordinarily high rates of poverty: In 2021, about 39.7 percent of the community lived under the poverty line, more than three times the rate among non-Haredi Jews, according to the National Insurance Institute.

But any serious efforts by the government to alleviate the problem by encouraging the young men to serve in the army (where they could acquire skills and better integrate into Israeli society) or require Haredi educational institutions to teach a core curriculum of math, science and English (to provide the next generation with workforce skills) are resolutely opposed by Haredi leaders.

But any serious efforts by the government to alleviate the problem by encouraging the young men to serve in the army (where they could acquire skills and better integrate into Israeli society) or require Haredi educational institutions to teach a core curriculum of math, science and English (to provide the next generation with workforce skills) are resolutely opposed by Haredi leaders.

So why is Gafni suddenly trying to encourage the public sector to hire the ultra-Orthodox?

Suddenly, employment

A close look at the legislation he has sponsored offers some insight. It calls for public sector employers, which include everything from government ministries, local authorities and state-owned companies, to adjust tests and training standards to make it easier for Haredim to apply for jobs. But the thrust of the proposed law is to set quotas for ultra-Orthodox employment by creating positions that are open exclusively to Haredi job candidates in proportion to their share of Israel’s population.

Presumably to help reach that quota quickly, during the first five years after the bill becomes law, the hiring quota will be double the ultra-Orthodox share of the population.

But nothing in the legislation would help make Haredim more employable by increasing their workplace skills and training. The bill would simply force employers to hire them in spite of their lack of qualifications. Not only hire them, but hire them for well-paid senior positions because the quota would apply to all job levels from office boy to C-suite.

As Meirav Arlosoroff has pointed out, this would put companies, such as the arms maker Rafael, in the untenable position of taking on reams of people with no engineering, math or other relevant skills. What would they do with them? Presumably, let them clock in and sit around all day, at the expense of profits and competitiveness and no doubt at a heavy cost to company morale.

Gafni’s proposal, in other words, is a make-work scheme for the ultra-Orthodox. But why after so many years of shunning the labor market is Gafni suddenly feeling the urgent need to create jobs?

Orthodox economics

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The answer is that the Haredi economic model has reached the limits of its capacity. The model assumed that to compensate for the fact that so few men are working and earning a living, that (1) the government would subsidize the community through an array of allowances and other financial aid and (2) women, who are not expected to devote their lives to Torah study, would supplement the state funding by joining the workforce to help support their families. The community would make do with a low standard of living knowing that it was the way to an ideal Jewish life.

An economist could have easily explained why such a model was unsustainable – but there aren’t many Haredi economists. With an average of 6.5 children per adult woman, the Haredi population has been growing at a rapid 4 percent annual rate. At that pace – and assuming there is no mass drop-out from the community – its share of the Israeli population is due to grow from about 13 percent today to 33 percent in 2040, the Central Bureau of Statistics predicts.

For the government to continue to support the ultra-Orthodox without cutting away at other critical services, like national defense, healthcare or schooling the non-Haredi population, and without raising taxes, the economy has to grow at least a 4 percent annual rate. It is probably a lot faster because the ultra-Orthodox population is young and needs more and more government services like education and daycare, and the cost of living (especially housing) is rising quickly.

That’s a tall order. In fact, the economy has been expanding at just under 4 percent annually over the last decade but, even after taking into account the drop during the COVID pandemic, that was a period of unusually strong growth. It can’t be counted on to steadily turn in such high rates of growth, especially as the Haredi (non-working) share of the population grows.

To their credit, Haredi women have done quite an impressive job fulfilling their designated role as family breadwinner. Unlike the men, their labor force participation rate has soared over the last two decades to 78 percent.

But as a source of community income, Haredi women are pretty close to being tapped out. Their participation rate is close to that of non-Haredi Jewish women (82 percent), so there’s not much more room for growth. Haredi girls get a better secular education than their brothers, but between large families and a lack of a college degree, they can’t hold down well-paying jobs or even full-time ones. On average, their pay is about two thirds what non-Haredi women earn.

Meanwhile, for many Haredim, poverty increasingly seems like too high a price to pay. The growth of internet usage, despite rabbinic disapproval, has broken the wall separating the ultra-Orthodox wall and the consumerist culture that surrounds them. The rise of a “Haredi middle class,” of people who own cars, take vacations, eat out and enjoy the comforts of bourgeois life – and need to make the kind of money to pay for it all – is evidence of that.

The ultra-Orthodox world in Israel has no choice but to cast about for new sources of income. The obvious one of encouraging the young to get a secular education isn’t an option. Although the number of Haredim pursuing a higher education is growing (reaching 15,635 men and women in the 2021/22 academic year), the number is swamped by those in yeshivas and kollels (138,367 men).

Ensuring Haredim jobs in the public sector is the perfect solution, albeit ultimately unsustainable. The state employs lots of people, the pay is very good, wage increases and promotions are awarded on the basis of seniority, not performance and the hours aren’t demanding. Haredi political power makes it easy to cow the government into hiring them.

Alas for Gafni and his friends, even in this especially Haredi-friendly government, legislation like he is sponsoring doesn’t stand a chance. And, if it did pass, it is hard to see how it could ever been implemented because the quotas its set are unrealistically ambitious.

But by introducing the legislation, Gafni has gotten the ball rolling on a new strategy. The Haredi leadership has set its sights on the public sector as its new cash cow. The only question is how it will use its political power to squeeze it.

David Rosenberg