"Welfare system could cause Israel to collapse, economist warns"
May 11, 2010, 05:19 PM
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From Edmund Sanders in LA Times:
Nearly one in five Israeli men between the ages of 35 and 54 do not work, including Arabs and ultra-Orthodox Jews, says Dan Ben-David. As their numbers rise, so does the economic peril, he says.
When people talk these days about Israel's economy, they use words like booming, resilient, even "miracle." ...
But one Israeli economist is warning that beneath Israel's back-patting lurks a hidden peril — fueled by demographic trends and political choices — that could eventually mean an end to the country.

Armed with a Power Point presentation he's been showing to lawmakers, newspaper publishers and anyone else who will listen, Dan Ben-David, executive director of Jerusalem-based Taub Center for Social Policy Studies in Israel, says the problem is simple: Not enough Israelis are pulling their own weight.

According to Ben-David, nearly one in five Israeli men between the ages of 35 and 54 — a group that he believes has "no excuse" for not working — are not part of the labor force. That's about 60% higher than the average among nations in the Organization of Economic Cooperation and Development, an international forum fostering market-based economies that Israel joined Monday.

Officially, Israel's unemployment rate is about 8%. But that doesn't include Israeli citizens who are not trying to find work, either because they feel disenfranchised, such as many Arab Israelis, or because they've chosen a life of state-subsidized religious study, such as many ultra-Orthodox Jews.

Nearly 27% of Arab men and 65% of ultra-Orthodox Jews don't work, government figures show. The non-employment rate for ultra-Orthodox men has tripled since 1970, Ben-David said. ...

What worries Ben-David most is that the nonproductive part of Israel's population, which survives largely on welfare, is also the fastest growing.

Today Arabs and the ultra-Orthodox together make up less than 30% of the population, but they account for nearly half of school-age children. ...

"Eventually it's going to break the bank," the economist said. "We're on trajectories that are not sustainable." ...

Reasons differ for the non-employment of Arabs and ultra-Orthodox Jews.

Over the last 30 years, the percentage of working ultra-Orthodox men has decreased because of government programs that subsidize their religious study, experts say.

Such programs are now facing a backlash from Israel's secular and non-Orthodox citizens. A radio talk-show host recently described ultra-Orthodox Jews as "parasites." Tel Aviv's mayor said the fast-growing ultra-Orthodox community was "endangering" the economic strength of the "silent majority."

But defenders of the ultra-Orthodox credit them with preserving Israel's Jewish identity, saying that without the high birth rates of ultra-Orthodox families, Israel could see an Arab majority in future generations. ...

"If I were Jewish, it would have been much easier to find work," said Salwa Idreis, 30, an Arab Israeli from Jerusalem who, despite earning a law degree, has been unable to find a job for five years.

"People don't trust us because we are Palestinian," said the mother of four. Even Arab-owned law firms won't give her a job because they think Jewish attorneys will draw more customers, she said.

So, when arrested, rappers, mafioso, and Palestinians all agree: "Get me a Jewish lawyer!"

Ultra-orthodox men on the dole doesn't really sound like a terribly insoluble problem for Israel. Israelis have the huge advantage over us here in the land of the free and the home of the brave that they are allowed to publicly discuss the implications of demographic trends without using the word "vibrant."