Lapid: Haredim Joining Israel's Workforce Will Create Burst of Economic Growth

Prediction comes as finance minister tries to gather support for austerity budget that also aims to lure ultra-Orthodox Jews into the workplace.

Masses of ultra-Orthodox Jews entering Israel’s workforce will give the economy the same boost the arrival of a million immigrants from the former Soviet Union did two decades ago, Finance Minister Yair Lapid predicted on Wednesday.

“If we want to create an economy based on innovation and creativity, their entry into the labor force is a shot in the arm comparable only to the wave of educated hard-working Soviet immigrants that boosted the Israeli economy,” Lapid told the Presidential Conference in Jerusalem, a star-studded gathering of leading figures from around the world hosted by President Shimon Peres.

The cheery prediction about Haredim comes as the finance minister tries to sell a controversial 2013-2014 budget, whose provisions call for deep spending cuts and big tax hikes but also contains a package of carrots and sticks aimed at coaxing Israel’s ultra-Orthodox into the workplace.

Among other things, it cuts child allowances to large families, a provision that will cut into Haredi income. It also slashes funding to ultra-Orthodox schools that don’t teach core subjects such as English and math that prepare young people for the job market.

Lapid said the efforts to integrate Haredim into the workplace are conventionally seen as a way to solve Israel’s low labor-force participation rate. But the finance minister predicted that because the Haredi community is so steeped in knowledge and scholarship it has the potential to contribute to Israel’s knowledge-based industries.

Lapid predicted that getting the Haredim to work would be a transformative event in Israeli history, citing the wave of immigrants who arrived after Israel’s founding in 1948 and the Soviet immigrants who came nearly after a century later and helped provide the foundation for Israel’s high-tech industry.

He said a society’s ability to change was the key to a nation’s ability to thrive and succeed.

“Israel has the ability to institute change without violence. We have the ability to reinvent ourselves,” Lapid said. “The country did it in 1948 when a small group of Holocaust survivors transformed themselves into soldiers who established the state,” he said.

Lapid also promised a “major undertaking” to attract multinational high-tech companies like Intel and Cisco, whose CEO, John Chambers, is visiting Israel this week and announced it was opening a research and development center here.

Chambers said Wednesday that Cisco will place $15 million in Israeli venture capital funds as part of a broader plan to expand its operations in Israel and outside the United States. 

Chen Galili