Do the haredim really milk the Israeli treasury?

The Israeli left takes its own entitlements for granted while exaggerating the subsidies the haredim receive.

The Grand Rabbi of Lelov (a Hasidic dynasty) and his followers light a bonfire at the end of Shabbat in Meron, near Safed, on June 3, 2023. Photo: David Cohen/Flash90
The Grand Rabbi of Lelov (a Hasidic dynasty) and his followers light a bonfire at the end of Shabbat in Meron, near Safed, on June 3, 2023. Photo: David Cohen/Flash90
Lawrence Solomon
Lawrence Solomon
Lawrence Solomon is a financial writer, a former contributor to The Wall Street Journal, a former oped editor of Toronto’s Financial Post and the author of seven books.

Israel’s haredi population is continually lambasted as a drain on the national economy. “The haredim suck our blood and they milk secular society,” Galit Gutman, an Israeli supermodel turned TV morning show host recently exclaimed during an on-air panel discussion. “How much of a burden can be placed on [the secular] third of this country?”  

The discussion that drew Gutman’s outrage dealt with a proposed municipal property tax reform before the Knesset—a bill opposed by the left—that would undercut the power of the bureaucracy in left-leaning Tel Aviv and benefit smaller and haredi municipalities.

Gutman’s outrage, though expressed with certainty, was misplaced. The status quo—a municipal tax system that perversely limits residential housing—has long been seen as needing reform, including by the OECD. The government’s proposed reform, far from being designed to place an unfair “burden” on the largely secular third of the country, would instead address a bias that raises housing costs for the rest of the country—haredi communities included. 

Contrary to the left’s portrayal of the haredim as beneficiaries of subsidies from the rest of society, often the opposite is the case. While non-haredi elementary and high schools receive full funding from the state, haredi schools have typically received 55% to 75% funding per capita and sometimes as little as 27%, on the grounds that the haredi curriculum focuses on Torah learning rather than subjects that benefit the high-tech sector and the economy at large. In effect, leftist governments have pocketed the savings from penalizing the haredim for insisting that they, and not the state, should determine what’s best for their children.

The pocketed savings are even greater at higher-learning levels. A yeshiva receives less than one-tenth the subsidy per student that secular universities receive.

The health system also pockets savings thanks to the haredim, partly because they are healthier than non-haredi Jews, leading to fewer demands on the medical system, and partly because the government shortchanges haredi communities in the provision of publicly funded health care services.

While the Israeli government does have programs that specifically benefit the haredim—most controversially, stipends of $350 a month for full-time Torah scholars—these amounts are dwarfed by subsidies spent on the general population in the arts, sports and high-tech industries, areas that don’t much benefit the largely insular haredim. The total annual budget for all full-time Torah scholars amounts to about one-half of 1% of all government expenditures.

Baby bonuses, which benefit the prolific haredim more than any other demographic, are continuously scorned by the left as a giveaway. Yet baby bonuses have long been employed by numerous Western governments, which fear the consequences to their economies and their cultures of a declining population.

In Israel’s case, the imperative of populating the land, which predated the founding of the state, has added dimensions, including the desire to overcome the losses of the Holocaust and to provide a bulwark against Israel’s populous hostile neighbors.

That secular families, who have the same per-baby entitlement as the haredim, don’t rise to the occasion should provide no license to scorn those who do.  

Many who argue that the haredim represent a burden on society are especially fearful of how the future will play out. Because haredi households earn about two-thirds as much as the Israeli average, and because they purchase fewer goods, they pay less income and sales taxes.

As the haredim represent a larger proportion of the population due to their very high fertility and very low mortality, in 10 years the haredim are projected to account for 16% of the population, up from 13% today. Many fear that future governments will need to raise taxes to prohibitive levels to support the services to which they’ve been accustomed.

These fears are overblown, if not entirely groundless. For one, the haredim are self-sufficient by virtue of their culture of philanthropy, voluntarism and mutual aid—89% of the haredim give an average of 4.6% of their household income to charity and 38% volunteer their time—leading to a plethora of services that don’t show up on the ledgers of the Ministry of Finance. For another, philanthropists abroad generously support Torah scholars in Israel.

The haredim also have relatively few material wants, in that they achieve status by pursuing knowledge rather than affluence. In the future, the haredim and the non-haredi should each be capable of supporting their own preferred lifestyles.

While the left accuses the haredim of being unproductive due to their refusal to work—Bloomberg has reported that the Israeli economy would get a boost of more than $5 billion a year if haredi men were as productive as other Israelis—a pertinent question is: Productive at what?

Most see affluence as a means to more fundamental ends, such as health and happiness. The haredim have found the formula to health and happiness by bypassing the intermediary step of affluence, as attested to by numerous studies over the years. According to the latest life satisfaction and happiness survey conducted by Panels Politics earlier this year, the haredim, despite a 44% poverty level, are the happiest group in Israel.  

According to a study of haredi Jews around the world, haredi males live an average of 83 years, making them the longest-lived male demographic on Earth. Haredi females, who average six to seven children, live an average of 86 years, longer than women in all but six countries.

While all Israelis would like to be healthy and happy, and to live as long as the haredim, only the haredim are willing to sacrifice materialism and do the disciplined spiritual work required to achieve those goals. Secular Israelis can’t be faulted for choosing materialism over spiritualism, but neither should they look down on the haredim, who by life’s most meaningful yardsticks are Israel’s overachievers.

The opinions and facts presented in this article are those of the author, and neither JNS nor its partners assume any responsibility for them.
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