Israel stands as a beacon of innovation and economic prowess, punching far above its weight on the global stage. Yet, beneath the surface of its thriving tech sector and robust GDP lies an archaic system of inequities and inefficiencies threatening its long-term sustainability. To secure its place as an enduring economic powerhouse, Israel must confront the outdated policies and skewed resource allocation that burden its hardworking majority while disproportionately favoring a select few.

The Archaic National Insurance System

The National Insurance (Bituach Leumi) system exemplifies Israel’s struggle to align with the principles of fairness and modernity. In its current form, the system perpetuates gender-based discrimination. Married women are exempt from paying into the system if their husbands work, while unemployed men, regardless of their wives’ income, remain obligated to contribute. This medieval approach reinforces outdated gender roles and penalizes families already struggling to make ends meet.

Amid rising inflation and skyrocketing costs of living, it is untenable to burden families further. If the government wishes to champion equality, it must apply the same rules to men and women. A modern democracy should not uphold systems that differentiate contributions based on outdated stereotypes.

Bituach Leumi does make you feel like that. Their staff are a law unto themselves.

— Mark Lewis (@MLewisLawyer) May 12, 2022

The Strain of Subsidizing Non-Participation

Perhaps even more troubling is the disproportionate allocation of government subsidies to segments of the population that do not contribute equitably to the economy. Ultra-Orthodox men, for instance, often avoid military or national service, a responsibility borne by the majority of Israelis. Many dedicate their lives to religious studies, supported by subsidies negotiated through coalition agreements, while their families receive additional benefits to fill the gaps. These arrangements were born of political expediency, but they have metastasized into a significant drag on Israel’s economy.

This system creates an imbalance where the productive third of the population shoulders an outsized burden. Doctors, nurses, and teachers—the backbone of any functional society—find themselves struggling with low wages, reduced benefits, and increasing workloads. A recent 2% pay cut for nurses, even as subsidies for the ultra-Orthodox increased, is a glaring example of misplaced priorities. These professionals should not need second jobs to sustain their families. If Israel continues to undervalue its essential workers, it risks not only the health and education of its citizens but also its standing as a nation of excellence.

Israel Democracy Institute (@IDIisrael) poll:

Support for conscription of Haredim (Ultra-Orthodox) went from 67% to 84.5% during 2024. Opposition to it dropped from 22% to 9%.

Me: How long can @Netanyahu keep ignoring such overwhelming public opinion?https://t.co/acvy7OAfhg pic.twitter.com/AZ2KO36xEJ

— Daniel Pipes دانيال بايبس 🇺🇦 (@DanielPipes) January 2, 2025

A Path Forward: Equity and Accountability

Israel’s leaders must recognize that long-term prosperity demands equity, accountability, and strategic investment in human capital. Several key reforms are urgently needed:

1. Overhaul the National Insurance System: Ensure contributions are based on income and ability, not gender or marital status. Families already struggling with unemployment and rising costs should not be punished further.
2. Reassess Subsidies: Subsidies should be tied to economic contribution and societal need, not political maneuvering. Able-bodied individuals who choose not to participate in the economy should not receive disproportionate support.
3. Invest in Essential Workers: Doctors, nurses, and teachers must be adequately compensated for their indispensable work. Competitive wages and benefits are necessary to attract and retain talent in these fields, ensuring Israel’s healthcare and education systems remain strong.
4. Foster Inclusivity in the Workforce: Encourage all segments of society, including the ultra-Orthodox, to participate in the workforce. Provide incentives for education and job training while phasing out subsidies that discourage economic activity.
5. Eliminate Gender-Based Disparities: Equality in rights and responsibilities is non-negotiable in a modern democracy. Laws and policies must reflect this principle, offering the same opportunities and obligations to men and women alike.

Conclusion

Israel’s economic success cannot be sustained on the backs of a hardworking minority. A just society ensures that all citizens contribute fairly and that essential workers are valued, not overlooked. The time has come for Israel to shed its outdated policies and build a system rooted in fairness, equity, and accountability. Only then can the nation truly fulfill its potential as a global leader—economically and morally.