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New government is economically harming Israeli Haredim

The anticipated doubling of stipends for full-time yeshiva and Kollel tudents, coupled with the total surrender of core studies in ultra-Orthodox schools, will encourage more haredi men not to work.

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This is a deadly combination for a haredi sector already mired in poverty, and for those Israelis who bear the burden. They will have to assume an even heavier economic yoke. This situation does not bode well for everyday Israeli life in the immediate term.

But even worse, it condemns hundreds of thousands of haredi youths to poverty and restricts their ability to integrate. In the face of the emerging government, whose priority is to maintain political power and control of the community, the responsibility for change will continue to be borne by society in general.
The ultra-Orthodox constitutes 13% of Israel’s population. Within the haredi community, the insular-conservative faction is growing at an astonishing pace, with a birthrate of eight children per woman, far in excess of any other group in the western world.

Over the next few years, the haredi community will likely comprise a third of the Israeli population as a whole. This is significant, as the number of conservatives among them who are fighting against labor market integration, core studies, and education will also swell.

The core studies debate is heated but less important than it seems. In their current form, core studies contribute little to ultra-Orthodox men’s abilities to participate in the workforce. First, such studies, to the extent that they exist at all, finish in eighth grade (at the latest). Moreover, the curriculum and lessons provided are woefully inadequate. The studies consist of a limited number of hours of math, English, and science, at a very low level, and in most cases, are taught by unqualified teachers, who lack ability.

The United Torah Judaism Party recommends the next PM. Photo by Shalev Shalom/TPS

The result is a poverty trap which erases opportunities for those haredi men who wish to pursue higher education and earn a decent income. And the numbers speak for themselves. Only a quarter of the haredi men who actually want to undertake academic studies complete their degrees. Most drop out along the way.
And yet, there are some indications that core studies are useful. For the 50% of haredi men who work, their average wages are only 57% of those earned by non-haredi Jews, simply because decent wages are out of reach without education. In addition, there are the “Torah students,”, those haredi men who do not participate in the workforce at all.

As well as the respect shown by the community for their dedication to Torah, the state also rewards them. They receive a variety of stipends and discounts, thus enabling them to ‘earn’, without working. In short, they receive an income which is similar to the current minimum wage in Israel.

If they go to work, however, they stand to lose a significant portion of their income and discounts. In numerical terms, the additional disposable income received by a haredi man who leaves kollel and goes to work, is currently only NIS 3,400 a month, whereas the loss of income from stipends and discounts amounts to NIS 9,000.
If the expected increase in yeshiva student stipends is granted, the additional disposable income gained by working will drop even farther. It could fall to around NIS 2,700, while the loss of income from stipends and discounts will grow considerably. Yeshiva students have no actual boss who expects them to show up in the morning. Further, they can make up any income shortfall by working on the black market.

Why would anyone give this up in order to get a real job? If Netanyahu’s promise to increase the budget for all ultra-Orthodox educational institutions is realized, the incentive to provide core studies will disappear entirely. In addition, should the demand for the doubling of stipends be met, the incentive to join the workforce will decrease even further.

Together, the result will be a downward spiral as haredi men will be even less able to study and earn a living. Their average wage would drop even further, along with the incentive to work. The employment rate in the ultra-Orthodox sector, which currently stands at 50%, could reduce to 30%, as it was 20 years ago.
You don’t have to be an economist to understand that if this becomes the norm for large swaths of Israeli society, haredim will grow even poorer. Accordingly, the rest of the population – working Israelis – will have to pay even higher taxes, until they either buckle, or flee. Even if taxes were raised, the country would still be less able to fund services at the same level for the entire population.

Although Zionism has prevailed, thus enabling us to live here, we may well end up sharing the same standard of living of the world’s poorest countries.

First published by The Jerusalem Post.