Austerity In Israel

Lapid's Budget: Let the Outsiders' Children Go Hungry

Gershom Gorenberg on the plan to force Israel's cultural outsiders work by making them poorer.

Yair Lapid's signature is all over Israel's new national budget, and not just because the former TV emcee is now the minister of finance. In the most generous reading, Lapid's willingness to adopt ministry technocrats' austerity measures shows that he's in over his head, and that his campaign promises to help the middle class have as much substance as the smile of a talk-show host. But Lapid did make some choices among the ideas offered to him, and his choices will most harshly affect the two groups in Israeli society that Lapid most likes to dislike: Arabs and the ultra-Orthodox. The budget is an economic offensive against the cultural outsiders.

Already approved by the cabinet, now before the Knesset, the budget is supposed to cure the swollen deficit created by the same ministry wizards under Prime Minister Netanyahu's last government. Here are a few ingredients of the purported treatment: The budget increases the utterly regressive value-added tax. It cuts child allowances—the government stipend to families, essential to the livelihood of poor and working-class families, especially large families. For the first time, housewives will have to pay taxes for health care and national insurance, which provides Israel's social safety net.

A half-explicit purpose of the new budget is to push Arab women and ultra-Orthodox men to get jobs. The goal itself is more than reasonable. Forty-five percent of working-age Israelis aren't employed. That's an immense drag on the economy. The proportion of Arab women and ultra-Orthodox men in the labor force is especially low—even if, nearly unnoticed, more members of both groups have been going to work. But the assumption built into Lapid's budget is that if you make the poor even poorer, takers will be motivated to become makers. (I use those terms deliberately; the budget has a Romneyite streak as wide as a runway.) This, in turn, presumes that low motivation is what keeps people from working.

In the case of Arab women, this isn't just wrong, it's offensive. The government has invested in industrial parks for Jewish towns but for very few Arab ones. Public transportation to Arab communities is sparse. In Arab schools, classes are larger and schooldays are shorter. Far fewer Arab than Jewish two-year-olds are in preschools—which give children an educational head start and their mothers an opportunity to work. Thousands of Arab women who have nonetheless made it through the educational obstacle course and graduated from universities or teachers colleges are looking for jobs. If the government thought rationally about getting Arab women to work, it would invest in daycare centers, schools, and industry in Arab towns. It could also insist that Jewish schools hire Arab teachers.

Ultra-Orthodox men would appear to provide a much better case. Since the creation of the state, haredi rabbis and politicians have created a society that is segregated from mainstream Israel by choice. As part of the self-imposed isolation, adult men devote their lives to studying Torah. Yet the system depends on the despised and productive mainstream society to foot the bill. What better example of willful joblessness?

What's voluntary on the communal level, though, is not at all voluntary on the level of the individual. Take a 30-year-old haredi man, who married at 20 under irresistible social pressure and who now has four or five children. He last studied math in eighth grade, never studied English, and had a sampling of "nature" rather than science as a subject in elementary school. The work world, with its customs and language, are as foreign to him as Finland. Three generations of political deals, convenient at the time for mainstream political parties, have crippled him economically.

The reality is that a shift has begun in haredi society—if not yet a revolution, the potential for one. More young men realize they need to work, and to get an education in matters other than Talmud. To promote long-term change, the government needs to reform ultra-Orthodox schools—something Lapid has promised, but hasn't yet shown that he knows how to deliver. The state will also need to invest much more in the education of adults, especially men. It will have to pay stipends to heads of families while they retrain, and will need to protect haredim from job discrimination.

In short, integrating Arabs and haredim into the economy requires investment. It also requires acceptance that people can work with you, be as interested as you are in the success of your company or school or agency, and still not share your semi-articulated idea of what it means to live in Israel. They still may not want to sing "Hatikvah."

It's much easier to cut child allowances, much more satisfying for Lapid and many of his voters. That won't produce jobs, though. It will only produce hungry children.