Tel Aviv’s struggle to integrate ultra-Orthodox, Arabs raises economic fears

BNEI BRAK, Israel: Chaim Rachmani spends his days studying Jewish religious texts in the Israeli town of Bnei Brak, whose crowded streets brush up against the office towers of Tel Aviv. He has no plans to look for work — ever.
While dressed in a pinstriped business suit, Rachmani is among half of all ultra-Orthodox Israeli men with no job. This trend in a rapidly growing community — along with employment problems among the Arab minority — is raising concerns about the long-term health of an economy now in the midst of a boom.
“My intention is to study for the rest of my life. I do it because I love it,” said 25-year-old Rachmani. “When you are taught from a young age to learn, you like it and don’t want to stop.”
He feels no need to venture beyond the walls of his yeshiva, an Orthodox Jewish seminary, to seek paid work. Rachmani’s new bride supports him with her entry level computer job at Intel Corp, while he receives a $500 monthly stipend from the state and donations for learning Talmud.
While Rachmani was born in Miami, he graduated from Maoz Hatorah, a school in Bnei Brak for boys aged 3-15. It teaches some reading and writing in Hebrew and basic arithmetic, but most of the day is devoted to religious studies.
Therein lies a major problem for economic planners. Thanks to their large families, ultra-Orthodox Israelis are forecast to become a third of the population by 2065, up from 11 percent now. But while female employment levels are in line with Israeli society, many of the men lack the skills needed to power a modern, first world economy — if they want to work at all.
Israel’s high-tech sector, which employs 9 percent of workers, is booming. Venture capital investment as a percentage of gross domestic product is the highest in the world, and growth is among the strongest of the developed economies.
But the overall figures mask divisions that, while also affecting less religiously observant and secular Israelis, particularly touch the ultra-Orthodox and Arab communities.
Poverty rates are higher than in all other developed countries, and income inequality is second only to the US within the OECD, a club for wealthier nations. Just 20 percent of the population pays 90 percent of income tax.
Bank of Israel Gov. Karnit Flug is worried. “This is an impossible situation. If we want to become a cohesive society, without unacceptable social gaps in levels, we will need to change the situation of a dual economy, which exists today, to that of a single economy,” she said.
“The path to get there passes through inclusive growth,” she told a recent conference, referring to getting all social groups engaged in the workplace.
Economists say Israel must change its priorities by investing in infrastructure, strengthening the education system and integrating the ultra-Orthodox and the Arab population — who make up 21 percent of Israelis — into the workforce.
Failure could eventually threaten the very existence of Israel, according to experts, who say creating wealth is vital for funding strong armed forces in a country that has fought several wars with Arab neighbors since 1948.
Israeli Arabs have low pay and high jobless rates, though for different reasons. “If you want the Arabs to be integrated in the economy, we need more spending,” said Johnny Gal, a researcher at the Taub Center for Social Policy Studies.
According to the Bank of Israel, 60 percent of Arab men work, many in construction, earning half of what Jewish men make. Just 25 percent of Arab women work, while 55 percent of Israeli Arabs live below the poverty line.