Israel’s Welfare Threat

Why a growing welfare state burden may be an existential threat.

Dan Ben-David, an economics professor at Tel Aviv University and executive director of the Taub Center for Social Policy Studies in Jerusalem, has been stoking fears lately in Israel with a 350-page report that says the country’s economic picture is grim.

The problems, Ben-David says, arise from two sectors: Israeli Arabs and ultra-Orthodox (or haredi) Israeli Jews. Both groups have high unemployment rates and are an increasingly onerous welfare burden on the productive part of the society. Unemployment among Arab men, as Ben-David recently told the Los Angeles Times, now stands at 27%, and for ultra-Orthodox Jewish men at no less than 65%.

Ben-David says the unemployment (or more precisely, nonemployment—referring to those who don’t desire to work) rate for ultra-Orthodox men has tripled since 1970 as more and more of them opt for a state-subsidized life as yeshiva students. Meanwhile the tax burden on ordinary Israelis—already augmented by particularly high defense and immigrant-absorption expenditures—keeps getting worse, and some blame it for Israel’s major “brain drain” problem of young academics going to live abroad.

But the scariest—even in a time of the Iranian threat—aspect of Ben-David’s message is demographic. He notes that, while Arabs and ultra-Orthodox together currently constitute less than 30% of the population, they account for nearly 50% of school-age children. Ben-David earlier told Jerusalem Post editor David Horovitz that according to current projections, by 2040 “78% of primary school enrollment will be haredi and Arab.” Such an entity would no longer be the Jewish-Zionist-democratic state of Israel, not least because the large majority of both Israeli Arabs and ultra-Orthodox are non- or anti-Zionist and don’t serve in the army.

Ben-David’s is not the only voice to sound these warnings of late. Ron Huldai, mayor of Tel Aviv, recently said the situation called for “rebellion” by Israel’s “silent civilian majority” and that “today Israel is probably the only country in the world where private education is being funded by the public, without it having to adhere to a minimum of educational demands”—referring particularly to the lack of secular subjects in the ultra-Orthodox schools. Columnist and TV personality Yair Lapid wrote in a “Letter to My Haredi Friend” that

I can no longer pay. The money is gone. There’s no more left. I don’t have enough to give my children, and I don’t have enough to give yours.

Many believe that both Huldai and Lapid have national political aspirations and so are starting to ride a handy issue. But if so, it only underlines the deep concern about the situation.

Indeed, Ben-David told Horovitz that educational reform is crucial and that Israelis—of all kinds—who are aged 29-54 and have a university degree fare far better:

Among Arab women in that age range who don’t finish high school, fewer than 10% have work, but among Arab women with a degree, the figure is 70%. And it’s around 90% for Arab men and for non-haredi Jewish men and women.

The difficulty is that educational reform in Israel is an intensely political issue. On the one hand, the ultra-Orthodox sector in particular has a deep ideological distrust of secular learning and resists calls to introduce subjects like math, English, and computers in its schools. On the other, in Israel’s fragmented parliamentary system, ultra-Orthodox parties keep wielding pivotal power in coalition governments.

Last year, for instance, Prime Minister Binyamin Netanyahu, a free marketeer who as finance minister sharply reduced child allowances to ultra-Orthodox families, nearly doubled some of them as the price for getting two ultra-Orthodox parties into his coalition.

At that time there was talk of the two largest secular parties—Netanyahu’s Likud plus former foreign minister Tzipi Livni’s Kadima—forming the core of a secular government that would bring about both electoral reform and educational reform, overcoming the ultra-Orthodox resistance to the latter. That idea foundered, though, both on Livni’s personal pique at not being premier and her professed belief in an illusory peace process.

Although some say Ben-David’s projections are exaggerated, even if they’re only partially right the problem will need addressing. For that, at least functional unity among secular parties will indeed be the key—requiring, in turn, leaders with both vision and responsibility on the national level.