Existential threat to the Israeli economy

But in terms of Israel’s future, the biggest reason to celebrate is the fact that the Haredi parties have been consigned to the opposition. The government is finally free to tackle what is nothing less than an existential threat to the economy from Israel’s rapidly growing ultra-Orthodox population.

Less than 30 years from now, the Haredim could account for close to a quarter of the country’s population, nearly double their share today, according to a recent projection by the National Economic Council. If nothing else changes and ultra-Orthodox remain as impoverished, under-employed and undereducated as they are today – they will become an impossible burden on the economy.

The standard of living will fall as a smaller share of the adult population holds a job; many of those who do have such low levels of education and skills that the only jobs they can fill pay poorly. Startup Nation will have become a distant memory because there won’t bearen’t enough engineers. The tax base will shrink, harming everything from schools to hospitals to defense.

Thirty years seems like a long time, but solving the problem is akin to steering the Titanic. The challenge is enormous, and societal the solutions take a long time to work their effect. – Changes in school curriculum, for instance, won’t impact on the workforce for many years, – and meanwhile the ship is getting closer and closer to the iceberg. Action needs to happen now in order to avert this entirely foreseeable disaster in the future.

The threat has been universally acknowledged by everyone but the Haredim themselves (whose leaders at least somehow think that the Torah-centered Haredi life that has emerged over the last four decades can somehow survive) and by Netanyahu (who cynically catered to their demands to ensure he had their Knesset votes).

It seems that at least some parts of the Bennett government still dream of bringing the ultra-Othodox parties into the coalition, and prefer to avoid any changes that will offend them. Fortunately, Avigdor Lieberman, the finance minister, is ready to offend.

Offense taken

Or, at least the Haredim are ready to be offended. After Lieberman unveiled to the socioeconomic cabinet on Tuesday a four-point plan to get Haredi men into the workforce, Shas lawmaker Moshe Abutbul called the finance minister’s measures “antisemitic” and motivated by “hatred, incitement and revenge.”

Real antisemites must be scratching their heads. Most of the program’s particulars have yet to be unveiled, but according to a report by Channel 13 News, they will comprise a stew of carrots and sticks.

On the one hand, discounts on municipal taxes and subsidies for day and afternoon care will be ended. On the other hand, adult men engaged in religious studies (avreichim) will need to spend just 20 hours a week at yeshiva instead of 40 to qualify for a government allowance and will be exempt from army service from age 21 instead of age 24.

Also, Haredi schools will get extra money to teach math, English and computers. But those that don’t won’t be penalized.

Treasury officials hope that if it lets avreichim spend less time in learning without losing their allowance, they’ll use the free time to get a job. Likewise, if the threat of army service is lifted, they’ll be more inclined to quit the yeshiva studies that entitles them to the exemption and find a job. And, if Haredi schools start to really teach a core curriculum, these young men stand a better chance of acquiring the skills needed for a decently paid job.

As things stand today, full-time learning is often a better-paying proposition than holding down a job. A 2019 treasury study estimated that between government allowances and subsidies, the average avereich gets 5,441 shekels ($1,705) a month. That’s not a princely sum (the average gross wage in Israel in 2019 was 10,784 shekels). But it is a lot of money when you consider the employment options for a man who can do little more than basic arithmetic.

Will Haredim take the bait Lieberman plans to dangle? That’s what the rabbis are worried about and why they despise Lieberman’s plans. Despite the facade of triumphalism arising from demographic trends and their long lockhold over Israeli politics, they have every reason to be worried. Here’s why.

Learning a hard truth

Ironically, the demographics actually work against the perpetuation of the ultra-Orthodox “society of learners.” They face an impossible task of trying to squeeze more and more money out of the Israeli taxpayer as the number of Haredi mouths to feed grows year by year.

That goes a long way toward explaining why there are signs that the society of learners is fraying at the edges. While the share of Haredi men in the labor force has stopped growing in recent years and may even be in retreat, the number of working women in the community has soared. Increasing numbers of Haredi families need a breadwinner, and it’s the women who are filling the role.

Meanwhile, more of the ultra-Orthodox, especially women, are getting a higher education to improve their job prospects. Even internet usage has soared over the objections of many rabbis – nearly two thirds of Haredim admit they use it – mainly for practical applications, they say. The number is probably far higher.

These are important developments because the economic pressures are coming hand in hand with greater exposure to the non-Haredi world. The exposure is mostly confined to technical knowhow, but give it time.

The rabbis are right to be worried. The young woman studying accounting or the teenager surfing the internet is naturally going to be tempted to look at other content outside what’s acceptable in the enclosed Haredi world.

The problem is that neither economic pressures nor the force of new ideas is going to work quickly enough to reverse the demographic threat, especially in the face of resistance from the ultra-Orthodox establishment.

The Bennett government has created a window of opportunity for the reforms to accelerate those changes, but that window could slam shut quickly. A coalition between the right and the ultra-Orthodox could easily return to power and doom the reforms. Even today, the polls show that’s the way an election would go. Lieberman must work quickly and decisively. It may be our last chance.

David Rosenberg