Welfare System Could Cause Israel To Collapse, Economist Warns

[Purveyor]

When people talk these days about Israel's economy, they use words like booming, resilient, even "miracle."

Weaning itself off socialist-influenced policies that once brought 400% inflation and 60% income-tax brackets, Israel's economy is now growing despite the international financial slowdown. Debt is manageable, the currency is strong; Israel's high-tech sector is admired worldwide.

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.

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http://www.latimes.com/news/custom/topofthetimes/topstories/la-fg-israel-idle-20100511,0,6313284.story

[Chulanowa]

1. That's right. It's the welfare checks.

Not, you know, the massive military budget or anything, heavens no.

Nice to see right-wing economics stink the same in other countries, too.

[eyl]

4. Actually,

While I don't know whether his numbers are correct, he does have a point.

Consider that the haredi (ultra-Orthodox) population is growing extremely fast, because they have a large number of children for religious reasons. Couple that with the fact that in many of the haredi sub-groups, a lot of men don't work because full-time study of the Jewish scriptures is considered to be a higher calling (though, unlike some popular sterotypes, not every haredi man does not work by a long shot). This is a population growth/unemployment rate which is largely due to religious imperatives

The money spent elsewhere is thus ultimately irrelevent - you could slow the trend down by cutting, say, defense spending, but you can't stop or reverse it.

That's not to say the situation can't be turned around by economic means. The article mentions that there has been an increasing involvement of heredi men in the workplace. But full-time study is still seen as more prestigious, so so long as the "rewards" for not working such as large-scale government support of yeshiva students (I might note that there's no corresponding support of secular university students) and other things like high child subsidies and especially the fact that haredi schools, even when they are state-funded, are not required to meet the Ministry of Education's criteria on subject matter (nad thus don't teach things like English or advanced mathematics), the problem will persist - it's as much a culteral problem as an economic one.

[DJ13]

2. The elites around the world want to force 'austerity' instead of paying their share

SSDC

(same sh*t different country)

[LeftishBrit]

3. What is the Hebrew word for 'Maggie Thatcher'?

[Donald Ian Rankin]

5. I think it's a rather different situation to in the UK

Unlike the UK, Israel has a large and rapidly-growing demographic (likely soon to be a majority), many (possibly "most", but I'm not sure about that) of whose men choose to work at entirely non-productive tasks (not "not to work" as such, I think) while living on benefits, and - even more worryingly - often deliberately choose to educate their children only in subjects that will be of very limited use in finding a paying, productive job.

I'm inclined to think that in the case of Israel, schemes whereby benefits for those who are capable of working for pay but go for long periods without trying to find a job are reduced may well become necessary (whereas I'm generally opposed to such in most countries).

[azurnoir]

6. How unfortunate for Netanyahu

from what I've been reading he can not afford to alienate the religious parties which he needs to stay in power albeit he could lose them to Feiglin

[LeftishBrit]

7. Fair point (Eyl also pointed this out)

I do tend to see such things in terms of my experience in the UK.