How could it be that Israelis are both the most — and least — hardworking people in the developed world?
The answer comes in figures published this week by the Taub Center for Social Policy Studies on the percentage of working-age Israelis who had a job or actively seeking employment in 2018.
They show that, at 82.2%, non-Haredi Israeli Jewish women had the highest workforce participation rate in the developed world (technically the second-highest, after women in Ireland, but we can ignore a country with just 300,000 people). Those Israeli women were more likely to hold down a job than women in Sweden, Switzerland, Norway, Germany or Britain.
Non-Haredi Israeli Jewish men were also no slouches, coming in third (at 87.6%) after Iceland (91.4%) and Switzerland (88.3%).
But that’s where workaholic Israel ends. The rate for Haredi men was just 47% to 49%, depending on the definition of ultra-Orthodox. That is the lowest among men in Organization for Economic Cooperation and Development member states, compared to at least 70% in these countries.
Israeli-Arab women were down there, too, at 39.9%. Only Turkish women had a lower rate, of 34.8%. Nearly three-fourths of Haredi women worked, as did 77.5% of Israeli-Arab men.
The two faces of Israeli labor at a time when unemployment is at near-record lows reflects our economy’s strange dualism — Startup Nation on one hand and on the other high poverty rates relative to other developed economies. Israel also is in the upper third of countries for high rates of income inequality.
We made great progress in the past decade in reducing both poverty and inequality, but both remain very high. The government and society as a whole have failed to merge into a single whole what President Reuven Rivlin has called the four tribes of Israel.
Our failure is partly due to a lack of determination and chronic ineffectuality.
Taub Center researchers Hadas Fuchs and Avi Weiss focused their attention on three segments of the population. Two, Haredi men and Arab women, are well known. A third group, however — Arab men, whose workforce participation rate was 77.5% in 2018, low for a developed country and in decline — has largely been overlooked.
For ultra-Orthodox and Arab women, the past 15 years saw a revolution in which increasing numbers in both groups found jobs and careers. Much of that had to do with Benjamin Netanyahu’s slashing government allowances when he was finance minister in 2003, giving many women little choice but to find a job.
But it also involved a cultural change that has raised the workforce participation rate for Haredi women to above the OECD average for women. These women are the big success story of the Israeli job market, but the problem remains that they tend to find part-time employment in fields such as teaching that pay poorly.
Among Arab women the revolution is still under way. Fewer than 40% of working-age women in this community worked in 2018, but that was nevertheless double the rate in 2003. Moreover, the rate of growth has accelerated in recent years as more and more Arab women pursue higher education. Indeed, Fuchs estimates that three-fourths of the growth in female Arab employment is tied to better education.
The rate of Arab girls completing the high school matriculation exam (Bagrut) doubled in the past 20 years to 60%. That is still well below the 76% rate for Jewish girls, but Arab girls are far more likely than their Jewish counterparts to take the exam in science subjects (80% versus 40%). At Israel’s colleges and universities, they now account for 16% of the student population, far higher than their share of Israel’s total population.
Still, the revolution is far from complete, as the low rate of workforce participation shows.
Meanwhile, the trends are going into reverse for Arab men: Their rate of completing the bagrut is a low 30% and their share of Israel’s student population has remained stuck at its 2009 level. As Eitan Regev of the Israel Democracy Institute has shown, their rate of unemployment has fallen below the average for all Israeli women.
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Moreover, their pay on average is now lower than Israeli-Arab women. Fuchs ascribes this to the fact that about half of Arab men work in physically demanding jobs in agriculture and construction and leave the employment market at a relatively young age. Others are being replaced by technology.
The story of Arab men testifies to the government’s failure and shows the cabinet resolution allocating 10 billion shekels ($2.7 billion) to help Arab communities isn’t enough. The political and social barriers they face to integrating into the Israeli economy are high.
Those failures are even worse for the ultra-Orthodox. For a while the number of Haredi men entering the workforce was growing, but that has stopped and even reversed in recent years.
Experts say Netanyahu is responsible for both the progress and the reversals of recent years . In 2003, as finance minister his cuts in allowances drove them into the workforce; in 2015, as prime minister he restored many of the cuts and enabled them to return to their yeshivas.
Today it’s hard to find any points of light in the Haredi employment problem. Not only are fewer working, but their educational levels of Haredi men is falling and they shun heavy physical labor. That means that even at the bottom end of the labor market, the number of jobs available to them is severely limited.
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