Just before Yom Kippur, some soul-searching at the national level requires us to address the basic problems of the Israeli economy. These are the structural problems that we have been dragging with us for years and that make Israel’s economic outlook appear so gloomy.
One of the clearest of these problems is the fact that Israelis don’t work. The rate of participation in the Israeli work force – defined as that segment of the working-age population that wishes to work (workers plus the unemployed) – is one of the world’s lowest at 65 percent. In other words, only two-thirds of the working-age population is in the work force. Another third, mainly Haredi men and Arab women, is not involved in the work force. Because of them, Israel’s work force participation lags dramatically behind other countries such as Switzerland at 75 percent participation, and Norway at 79 percent.
But these statistics are not exact. An international comparison of work force participation is based on a working age defined between 15 and 64. In Israel, one can’t join the workforce before age 20 or 21 because of army service, so the real relevant comparison between Israel and the world is 25 to 64.
This comparison, as calculated by Michal Zuk, employment commissioner at the Ministry of Industry, Trade and Labor, paints a surprising picture: From this perspective, the rate of participation in Israel isn’t so bad after all.
In 2010, average rate of participation in developed countries was 76.2 percent, compared with 75.5 percent in Israel, not significantly lower. In 2011, Israel’s average climbed to 75.9 percent. It looks like Israelis work more than we think.
But this statistic isn’t exact either because it’s based on an average. When that average is broken down by sector, we get the real picture: severe lack of participation in some sectors countered by sky-high participation in others.
As expected, our weaker sectors are Haredi men and Arab women. Only 48 percent of Haredi men work (according to 2011 statistics) and only 28 percent of Arab women. While in both cases the statistics have improved, even dramatically, they are still very low. Consider that the rate of participation among secular Jewish men is 86 percent – almost double that of Haredi men.
In addition to the low rate among Haredi men, the low rate of Arab men – only 76 percent – brings the average for Israeli men down to 82 percent compared with 86.3 percent in the OECD countries.
But the real story is not to be found among the men. The real story of the Israeli employment market is the women. While most Arab women don’t work, and while the rate of participation among Haredi women is reasonable (66.2 percent, identical to the world average), secular Jewish women are record-setters when it comes to participation in the workforce. Their rate of participation is 79.5 percent, far above the OECD average of 66.2 percent. Only three other developed countries (Sweden, Iceland and Norway) have higher participation rates among women.
The average rate of participation among men is five percent lower than the OECD average, while the average rate among women is four percent higher. It’s the diligence of secular Jewish women that brings the average rate of participation in Israel to just one percent lower than the general OECD average.
What can we conclude from this? That we still have a substantial problem among Haredi men and Arab women, and these populations need attention. But the high rates of employment among Israeli women compensate for that to a large extent.
Some don’t welcome this statistic. Some see it as part of an unjust cycle in which women have to work more in Israel because cost of living is so high, which is the result of, among other things, the fact that substantial segments of the population don’t work and live off government subsidies. In other words, Israeli women cannot afford to stay at home and raise their children in peace, as European women do, because they must support the idleness of Haredi men and Arab women.
On the other hand, we cannot deny the fact that the work of Israeli women improves family income in Israel a great deal, improves the Israeli economy overall, and improves the status of women in Israel significantly.
In short, women are saving the Israeli economy.
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