In 2002 and 2003, Israel experienced the worst economic crisis in its history. The government, which realized the seriousness of the situation, took emergency measures to stabilize the economy. Among these was to slash the budget, including a broad cut to National Insurance Institute allowances.
Today, 10 years later, Israel is seeing the fruits of those cuts: Not only was the country saved from a crisis along the lines of the Greek one, but an economic imperative was created that led large numbers of ultra-Orthodox men and Arab women to join the workforce. As a result, social gaps in Israel are on the decline.
But that is happening only after 10 years. In the first five years after the 2002-2003 cuts, Israel experienced a huge rise in poverty and deepening of social gaps. Farther down the road, the government realized that weaker segments of the population which do not participate sufficiently in the job market need more than an economic imperative to go out and work; they also need help to do so. Complementary measures, like the Wisconsin Plan to help find work, and financial support for the working poor such as negative income tax, were implemented a few years later - and meanwhile, thousands paid a high personal price.
Israel is now at a similar decision-making juncture. For the first time in decades, political circumstances are such that progress can be made on the issue of equal sharing of the burden - the burden of military service and of working for a living. The political world is jumping at the chance and intends to take full advantage of the circumstances and fix all the shortcomings that have accumulated over the years and led to the ultra-Orthodox not studying the core subjects, not serving in the army and not working. Indeed, the destructive lifestyle of the ultra-Orthodox must change, and there is a historic opportunity to generate change.
However, the lessons of 2003 must echo in the ears of the politicians. It is not enough to issue edicts, there must also be support and assistance.
The governor of the Bank of Israel has warned the prime minister and the finance minister that a stockpile of measures planned to augment equality in sharing the burden could lead to a decline into terrible poverty of Haredi society and Arab society (which pays the price of the Haredi refusal to serve).
This must not happen. The state must find the golden mean. It must offer encouragement to enter the labor market through positive and negative economic incentives. It must distinguish between the ultra-Orthodox and the Arabs. And especially, it must offer assistance to the Arab and the ultra-Orthodox populations in finding work.
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