The economy

The fact that the contribution of the haredi to the national economy is abysmal is incontrovertible.

The haredi women’s rate of participation in the labour market has been going up to reach a level not very far from that of other women save for the facts that a) a substantial number of them work on a part-time basis; b) in any event they work less than 35 hours a week in ordinary times with interruptions caused by the pregnancy periods.

The haredi men on the other hand on the average have a substantially lower rate of labour participation compared to the secular male work force. The curriculum of the yeshivas continues to exclude the subjects that would make the haredi youngsters suitable for gainful employment and earn higher incomes. Hence, save for their natural intelligence and aptitudes these students are mostly, if not wholly, unsuitable for gainful employment except in the most menial jobs that offer little prospect of advancement, provided they remain on the job market when a student’s lifestyle in the yeshiva looks far more attractive than laboring for such jobs.

In this regard, in July of 2019 Shahar Ilan of CTeck reported that Assar Walsenburg, the deputy head of the budget division of Israel’s Ministry of Finance, at a conference held by IDI, presented the data which shows that “the employment rate of the haredi men has been on a downward trend for the last two years dropping from 52 percent to 50.5% compared to a rate of 87% for the non-Orthodox men.

The reader may say, well putting aside for a moment, the low rate of participation surely a decline of 1.5% can’t be that serious.” Well, based on the calculations of the Ministry of Finance, Walsenburg stated that “in the event this trend or overall state of affairs persists “this would cost the Israeli market, in approximate dollars, $11.25 billion a year by 2030 and $112.5 billion by 2065.”

When one adds to the foregoing figures the costs of the low participation rate of the haredi men and women for the preceding decades, the total economic burden simply in terms of the rates of labour participation, the dollar figures reach the realm of astronomy without even accounting for the government subsidies and payments for the maintenance of the haredi community.

Now in case, the reader has been reading about the promising rate of participation of the haredi in the high-tech sector, the most recent data on the subject is sobering.

On May 23 inst. the Israeli business daily Globes reported that “Israel is struggling to incorporate Arabs and haredim into its blossoming high-tech sector.” The report citing newly released Israel Innovation Authority (“IIA”) figures, notes that more than half of Israel’s exports come from high-tech sector (54%), which employs 12% of the country’s workforce.

IIA’s figures for 2021 showed that “the number of haredi employees in the sector fell by 6%, with 1,200 haredi women leaving the sector and 500 haredim joining it.”

IIA chairman Ami Appelbaum stated that the figures partly reflect the impact of the coronavirus pandemic, “which led to many haredi women leaving work in order to be at home with their children, while more men completed special training by organizations catering to the religious community that won Ministry of Economy and Labor tenders.”

At all events, the 2021 report states that the percentage of haredi employees in the high-tech sector stood at 3.4% JNS, May 24, 2022.

According to Israel’s Channel 12 News, Avigdor Liberman the current Minister of Finance- a long-time foe of the haredi political parties who is often vocal about his efforts to enact changes unwanted by the haredi community- is planning a series of new measures as he considers the possibility that the government will not succeed in passing a 2023 budget before the elections are called (Times of Israel Staff May 25, 2022).

The proposed changes are reported to be: a) to cut the budget allocated to yeshiva students by a third from NIS 1.2 billion (U.S $360) million to NIS 800 million (US $240 million); b) to reduce funding the private haredi school system from 100% to 75% and c) allocating benefits like daycare subsidies, rental assistance and property tax discounts only to those who earn a certain level of income-cutting off those who study full time (Times of Israel Staff, supra). It has also been reported that the proposed sum will be available to the extent yeshiva students take three subjects, including mathematics, which will improve the students’ marketability in the labour force.

With respect to the third item Liberman originally pushed a plan under which starting in 2023, subsidies for childcare would be granted if parents work at least 24 hours a week. The move would have effectively ended subsidies for some 21,000 children, many of them from the haredi families in which the father learns in the yeshiva (Times of Israel Staff, supra).

Already, with respect to the day care subsidies, a Yamina MK explicitly demanded that the day care subsidies to remain untouched as part of an ultimatum for him to remain in the splintering coalition. In response Liberman agreed to postpone the effective date of the cut to 2024 (Times of Israel Staff, supra).

In Israeli politics, 2 years is an eternity. Barring a miracle, I would put the chances for the realization of the Liberman proposals to nil, provided of course he remains in the Finance portfolio, again the probability of which is not far from zero.

In the meantime, the Religious Zionism party reacted to the Channel 12 news report by characterizing the Liberman’s proposals, of all things, as racist. (Times of Israel Staff, supra).

On the other side of the balance sheet, if one can call it that

Israel faces the difficult challenges of securing the vast sums of money in order to prepare for and deal as effectively as possible with a number of major problems confronting its national security both at the home front and beyond.

Given the limitations of space, I will focus on the major one and refer to a limited number of others.

The expected major earthquake  

In December of 2020, Tel-Aviv University researchers completed a study of the prospect of Israel being struck by a major earthquake in the coming years.

The statement issued by the university about the findings of the study reads, inter-alia, “In the coming years, it is likely that a devastating earthquake will hit, causing hundreds of deaths. The study further estimates that “the earthquake will have an estimated 6.5 magnitude on the Richter scale, enough to destroy poorly built buildings, cause damage to the stronger ones, and I would add particularly, to the increasing number of high-rises which are being built with increasing frequency. As Prof. Shmuel Marco, head of Tel-Aviv university’s Porter School of the Environment and Earth Sciences put it: “The geological record does not lie and a major earthquake in Israel will come.” Presumably, as a matter of State secrecy, neither the researchers not the university addressed the full nature and the scope of the destructive impact of the earthquake on military and security installations.

On October 4, 2021, the Israeli Institute for National Security Studies (INSS) issued INSS Insight No.1521 authored by Dr. Ariel Heimann titled “An Earthquake in Israel: A Danger to National Security and National Resilience” while he was Distinguished Visiting Fellow at the INSS.

Dr. Ariel is a geologist, teaches at the Hebrew University and previously served as a senior researcher at the Geological Survey of Israel. His research is focused on earthquakes, plate tectonics and other subjects of Earth Sciences. He was for many years a member in the Israeli governmental committee for defending against future earthquakes.

His estimates of the adverse impact of the earthquake are far grimmer than those provided in the study of 2020. The author summarizes his expert opinion of the matter as follows:

“A destructive earthquake in Israel is not a question of if if, but when. A reference scenario that was presented to the Foreign Affairs and Defense Committee in 2016 estimated that 7,000 people would be killed, tens of thousands injured, infrastructure damaged, hundreds of thousands of buildings damaged, and hundreds of thousands of people evacuated from their homes. In such a scenario, Israel would be thrust into a state of ongoing disaster, with the government systems hard pressed to contain and handle the event and its numerous serious ramifications. Moreover, state authorities are not sufficiently engaged in the necessary preparations for this acute threat. The ministerial committee responsible for the issue has not convened since 2014, funds for strengthening buildings are not allocated, and there is no overarching body in Israel with responsibility and authority in charge of managing overall state preparedness for mass disasters. Even though an earthquake is a likely and significant threat to Israel’s national security and resilience, the resources and attention dedicated to preparedness for it are significantly less than those allocated to preparedness and confrontation with other threats, including the COVID-19 pandemic and the threat from Iran.”

Anna Ahronheim confirmed Dr. Heimann’s conclusion in a paper titled “Israel is not ready for the big earthquake to hit-analysis” (Jerusalem Post, January 23, 2022) where she quotes the corroborating statements of the former head of National Emergency Authority and the current Minister of National Defense Benny Gintz

The manifold problems expected to be caused by the earthquake, albeit key ones are not the only of the major challenges facing Israel. The other challenges include, by way of example, the costs of a) securing the military infrastructure; b) building and maintaining an adequate and readily accessible number of civilian shelters; c) future wars with Hezbollah, Hamas and PA’s terrorism that will continue to spread domestic terrorism, and c) the problems and the costs of dealing effectively with climate change .

With respect to climate change, this past week, the Weizman Institute’s Earth and Planetary Sciences Department, published the study Nature Climate Change “which revealed, inter alia, that the climate change is “already causing a considerable intensification of winter storms in the Southern Hemisphere to a level not anticipated until 2080” and warned that climate change “might be more rapid than predicted.” It concluded that “this means that rapid and decisive intervention is required in order to halt climate damage in this region.” (Times of Israel Staff May 27, 2022)

In the final Part 5, I propose to address the negative impact of the haredi on the fabric of the Israeli democracy.