Israeli Ultra-Orthodox Do the Math in Bid to Enter Workforce

Israeli Ultra-Orthodox Find Path to Work Uses Secular Education

When Shimon Shur, an 18-year-old Israeli from an ultra-Orthodox Jewish home, decided he wanted to work rather than spend his days immersed in religious studies, he first had to learn to multiply and divide.

His education at that point, grounded in his community’s tradition, consisted almost solely of learning Jewish texts such as the Talmud. He knew virtually no English and barely any math. All he knew, he said, is that such a life wasn’t for him.

“I started from zero,” said Shur, wearing a black skullcap, white shirt and black pants as he spoke at a Jerusalem institute that combines religious study with academic classes. “I didn’t know arithmetic, multiplication tables, division. I didn’t know the order of the English alphabet, not even ABCD. I hardly knew what the letters looked like.”

Pushing men such as Shur into the workforce is one of the Israeli government’s top priorities, to ease their drag on the economy. The group, called haredim for a Hebrew expression meaning “trembling before God,” are projected to grow to 18 percent of the population by 2030, from 11 percent in 2010.

Because their community values full-time study above any paid occupation and rejects Israel’s obligatory military service, many of its men remain outside mainstream Israeli society. About 46 percent of working-age men in the community were employed in 2011, the most recent year available, compared with 78 percent for all Israeli adult males.

Income comes from government stipends, charity and, in many cases, a working wife. Unlike men, haredi women are educated in such work-oriented fields as teaching and software engineering after they get 12 years of religious and secular education.

Bank of Israel Governor Karnit Flug expressed concern about the relatively low workforce participation of haredi men, and Israeli Arab women. In her first speech after the cabinet approved her appointment, she said “changes in employment patterns” were necessary to allow continued economic growth.

Growth Reduction

“This is a strategic threat for the Israeli economy and for Israeli society — one that we must not ignore,” Flug said on Oct. 29.

A year before, then-Bank of Israel Governor Stanley Fischer, whom President Barack Obama has nominated as vice-chairman of the Federal Reserve, also called attention to the trend in a group whose birthrate is 6.5 children per family, versus three per family for all Israelis.

“I very much respect the ultra-Orthodox population, but I must say a continued increase in the share of the population which does not participate in the workforce cannot continue forever, and so has to stop,” Fischer said in a Jan. 2, 2012, speech.

Ending Subsidies

The opportunity to overcome entrenched political opposition to getting more haredi men into the labor force arose after elections a year ago. Prime Minister Benjamin Netanyahu was able to form a government without two ultra-Orthodox parties, Shas and United Torah Judaism, that had been part of almost every ruling coalition for the past 30 years.

Taking their place was new political faction Yesh Atid, which had campaigned against military service exemptions and subsidies for the haredim.

Yesh Atid chairman and new Finance Minister Yair Lapid proposed a bill last year to reduce the number of military exemptions for ultra-Orthodox students in religious schools to a maximum of 1,800. The remainder would be subject to the draft after a certain age; now all are exempt while in yeshiva, or religious schools.

Concurrently, those already over the age of 22 would get a permanent draft exemption, freeing up about 28,000 haredi men to start working. The bill passed its first reading in July and is under discussion in parliament.

Child Allowances

Facing budgetary pressures, the government last year also cut child allowances that had helped support many large families in the community, increasing the economic incentive for haredi men to start making a livelihood.

With unemployment at 5.5 percent, a 30-year low, Lapid says he’s confident the economy will be able to absorb the new workers, even if many lack the math skills and English that are taught to all Israelis in schools outside the ultra-Orthodox educational system.

The Economy Ministry has earmarked 500 million shekels ($143 million) over the next five years for programs to give haredi men the needed skills.

Included are programs to offer vocational training, job placement services and employment counseling. The first “one-stop” job center is operating in Bnei Brak, the largest haredi-majority city in Israel and one of the country’s poorest communities. A second is set to open in Jerusalem in March and another half-dozen are planned across the country this year.

Resume Preparation

On one recent morning, several men gathered around a large conference table in a classroom at the center, watching a Power Point presentation on preparing job resumes. Instructor Dudi Stern advised them against using an e-mail address and home phone number instead of their names — a practice some follow because they can’t even write their names in English.

The government is also helping support a pilot program combining religious studies with English, math and computer training for students from yeshiva. Shur has been there for one month and has made progress, though he is still finding it difficult.

“The challenge is to break through all the obstacles: in English, learning a new language; and in math, developing the logic that you didn’t have until now,” said Shur. “It doesn’t matter how talented someone is, math is a different way of thinking.”

In addition to the academic demands, the young men have lost their “framework” — the yeshiva, said Rabbi Karmi Gross, who runs the center. Many are rejected by their families and community, he said. His program provides religious as well as emotional support to encourage success.

Kosher Requirements

Shur, who said he wants to go into white-collar work, found that one of the hardest parts of his decision was explaining it to his family. They expected him to attend yeshiva.

“It was a difficult process, telling my parents, destroying their dream for me,” he said.

Even with the new vocational tools, cultural impediments may discourage some employers from hiring haredi men. Companies may have to take into account kosher dietary laws in cafeterias and requests for time set aside for daily prayers, as well as traditions of modesty that discourage associating with any members of the opposite sex outside their families.

One company that was successful in integrating such workers is Jerusalem’s NDS Technologies Israel Ltd., which develops software for digital and pay-television systems. It was acquired in 2012 by Cisco Systems Inc. (CSCO) The company provides haredi workers with strict glatt-kosher eating spaces and accommodates requests for same-sex work areas.

Technology Needs

“The high-tech industry needs more workers, so it’s a win-win for us and for Israel,” said Zika Abzuk, a business development manager for the company. “There’s work to be done on both sides of the equation to overcome prejudices and fear from both haredim and employers.”

Technology companies, where software developers often work in small teams easily segregated if necessary, can provide a good environment for haredim, said Gershon Porush, a projects manager at Cisco who himself emerged from that background a quarter-century ago.

Based on his own experience, Porush co-authored a report submitted to the government in July laying out a detailed plan for developing a central authority to oversee and expand on educational and training programs for the ultra-Orthodox.

Analytic Capabilities

The report argues that despite cultural obstacles, haredi men who have spent years engaged in intensive communal study of Jewish texts are particularly suited for such work, “since they excel in learning ability, analytic capabilities developed in cooperation, and teamwork.”

Those obstacles haven’t disappeared, said Maor Israel, 19, who studies in the same program as Shur.

“A lot of guys I learned with at yeshiva say ‘Good for you, I would like to do the same but it’s hard for me,” he said. “They are afraid of the reaction from their family, friends and yeshiva heads.”

To contact the reporters on this story: Calev Ben-David in Jerusalem at cbendavid@bloomberg.net; Alisa Odenheimer in Jerusalem at aodenheimer@bloomberg.net

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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