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Jerusalem - Gov. Economist: Israel’s Financial Projections Are Weak If More Haredim, Israeli Arabs Don’t Join Workforce

Published on: June 1, 2015 09:27 PM
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FILE - Ultra Orthodox Jewish men watch construction work in Bnei Brak, on December 10, 2014. Photo by Yaakov Naumi/Flash90. FILE - Ultra Orthodox Jewish men watch construction work in Bnei Brak, on December 10, 2014. Photo by Yaakov Naumi/Flash90.

Jerusalem – Numbers released two years ago by the Central Bureau of Statistics regarding Israel’s demographics have sparked interest in the financial security of the state by 2059.

Assaf Geva, an economist in the Finance Ministry, has been studying the numbers for the past 18 months, and the future doesn’t look bright, reports Haaretz (http://bit.ly/1Kz5Rlr ).

According to Geva, government spending will grow by 1.2 percentage points faster than gross domestic product per year because of Israel’s aging population. At the same time, work-related tax revenues will shrink over time because Haredim and Israeli Arabs – groups who both have lower labor-force participation rates than the rest of the population – will make up a bigger share of the population.

The Central Bureau of Statistics estimates that by 2059, the non-Haredi Jewish portion of the population will have shrunk to 50.3 percent of the total, from 67.9 percent today; the Haredim share will have more than doubled to 26.6 percent, up from 11.1 percent today; and the Arab share will reach 23.1 percent, up from 20.9 percent.

Geva’s analysis shows that engaging more Haredim and Israeli Arabs in the workforce affects all Israelis.

The growing distance between government spending and government revenues, a gap of 0.8 points, equals a 9 billion-shekel shortcoming, or about $2.3 billion.

That gap is the best-case scenario for Israel, which assumes that government will raise the retirement age and bring more Haredim and Arabs into Israel’s workforce.

If more Haredim and Israeli Arabs are not integrated into the labor force, government revenues will trail spending every year by 35 billion shekels. Geva assumes Israel’s debt ratio percentage would reach 170 percent at that point – the level Israel had when its economy spiraled downward quickly in 1985.

Information taken from Haaretz


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Read Comments (5)  —  Post Yours »

1

 Jun 02, 2015 at 08:09 AM MelShtreim Says:

The men in this picture are not really there, they are in Kollel learning.

2

 Jun 02, 2015 at 09:11 AM lavrenty Says:

the solution is actually very simple to both, stop welfare and both groups will be RUNNING to go to work. The Arabs must be encouraged to leave or be liquadated and the Haredim must have ALL their welfare cut off, particulary kollel subsidies.

3

 Jun 02, 2015 at 10:12 AM BarryLS1 Says:

Reply to #2  
lavrenty Says:

the solution is actually very simple to both, stop welfare and both groups will be RUNNING to go to work. The Arabs must be encouraged to leave or be liquadated and the Haredim must have ALL their welfare cut off, particulary kollel subsidies.

Oy! Liquidated? Encouraged to leave is one thing, but we are not them! Also, there are people who are truly poor and unable to work. A just society doesn't through them to the wolves.

I do agree that people capable of working should be cut off welfare, after job and skills training programs and a reasonable time period. The current system is unsustainable.

The reality is that there are many Chareidim working, but nowhere near enough and that many are pretending to be learning full time.

Also, I wonder if the Finance Ministry added the gas and oil finds to the equation.

4

 Jun 02, 2015 at 11:32 AM Tea Party/ Ex Kollel Says:

We need a three pronged solution
1) First and foremost charedim have to wake up and smell the coffee. Why not "adopt a jobs progarm"/ colege courses rather then adopting kolllels. We must accept accountants who work in Tel aviv into our schools and society just as yungerlit. Please don't sell me the army excuse. Thats baloney The proof is that those who were over 25 when Lapid got rid of the Tal law can work with no army service at all. And charedi schools can teach a bit of Math and science. They won't shmad.
2) The Israeli government must crack down on anti charedi discrimintaion in the work place and army. Just as they are enacting tough laws to protect Ethiopians and as the USA has tough religious laws. (As seen in yesterdays supreme court ruling) I believe with enough tact the charedim can get these laws past. But I fear that UTJ & Shas care more about govt funding and welfare than they do about jobs.
3) The israeli government has to stop its social welfare libreal stuff. Child, family subsidies should be distrbuted as "earned income credits". If you work on the books you get money. Otherwise zilich. Vat tax should be elimintaed for middle and low class earners as well.

5

 Jun 02, 2015 at 04:59 PM Anonymous Says:

Another factor he did not account for is that the secular Israelis who drive the economy will flee in droves if the Charedim, as their population increases, attempt to impose more religious control over their lives.

6

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