'Arabs, Haredim Not Working Will Become Macro Danger'

Finance Minister: If, in 20 years, Arabs and Haredim don't join the army in hordes, Israel will still be able to defend itself. But if they don't get off welfare and start working for a living, Israel will have a macroeconomic problem.

If, in 20 years, Arabs and Haredim don't join the army in hordes, Israel will still be able to defend itself. But if they don't get off welfare and start working for a living, Israel will have a macroeconomic problem, Finance Minister Yuval Steinitz warned yesterday at the Sderot Conference for Society.

"In the early 19650s, [Prime Minister David] Ben-Gurion made a historic mistake in exempting Haredim and Arabs from army service," Steinitz went on to say. The fact that workforce participation is significantly less in both communities, in comparison to the general population, might be related to their draft-exempt status, he speculated.

Students protest outside the Sderot conference: ‘Can’t buy food with Torah studies,’ one sign reads.Tomer Appelbaum

The Finance Ministry has allocated NIS 350 million for the purpose of getting more Arabs and Haredim to work, Steinitz said.

Israel's economy has remained robust despite the ravages of the global economic crisis that began in 2008, but just as unemployment has become a huge issue overseas it is one here too, he said: and lest anyone labor under an illusion, the crisis could yet hit Israel full-force.

Ayal Kimhi of the Taub Center for Social Policy Studies in Israel dwelled on social gaps. "In Israel, social gaps are wider than in the nations it aspires to emulate," the professor said. "Among the Haredim, the rate of poverty is higher. It's convenient to blame everything on welfare allowances, but they aren't the main cause. The allowances treat the symptoms, not the problems."

Above all, Kimhi said, poverty attests to a problem in the labor market. The key to exiting poverty is work, and in today's society having just one breadwinner per family won't do the trick.

He also noted that the wage gap between skilled and unskilled workers is widening. "The power in the economy is passing from manufacturing to the finance sector, to the benefit of people with higher education," Kimhi said. It's basic supply and demand: The demand for highly skilled workers has been growing faster than the demand for unskilled ones.

The solution to social gaps lies in education that encourages achievement and provides students with employable skills, Kimhi said in closing.

Yossi Farhi, director of the Israel National Employment Service, threw in his two cents, too: In contrast to the advocates of higher education, he argued that Haredim can be trained for a profession within a year. "The fact that Haredim don't study core subjects doesn't hinder them finding work," he argued yesterday, flouting the conventional wisdom in government. They know how to study hard, he said. He also threw cold water on Steinitz's link between military service and work: "That link isn't true, it's destructive," he said. "What's needed are systems to prepare Haredim for the job market."