Jan 7, 2013

Training Haredim to be Diamond Polishers

The country can talk all it wants about "shivyon b'netel" - sharing the [military] burden - the catchphrase under which the discussion surrounds the attempt to draft the haredim (yeshiva students specifically), and surely it is an important issue that needs to resolved. I don't know how, but drafting them forcefully won't work, and a reasonable solution must be found.

In my opinion, the more important issue, the one that is more serious and affects Israel in a much more serious way, and by its resolution Israeli society, and the economy, will be helped and improved much more, is having the haredi community join the workforce in much greater percentages.

I don't know the solution, but finding one will improve the economy by bringing all these people into the creative workforce, and it will also improve their own personal and family situations. It must include education, as education is always part of the solution in these matters, but that is more part of the long-term solution than the short-term solution.

It is equally important to find a short-term solution, as we have thousands of people in their 30s and 40s who are largely unemployable. If one of them was to decide that the time has come to leave kollel and look for a job, he would not be able to find one. He does not have the time to study for 3 or 4 years, as he needs a parnassa now. He does not have the money to be able to afford lengthy courses and training programs. The education part of the solution does not really work for the many people who are already stuck, by hook or by crook, in the system. It is important for their kids and the future, 10, 20 50 years down the road and more, but for those needing a solution now, education is not the answer, or even part of it.

It is initiatives like this one, industries seeing in the haredi community the potential for training and employment, that are important to solving the crisis, to helping the people find respectable jobs, and to help the Israeli economy in the long and short term - by reducing the welfare payments and by increasing the productive output. According to Reuters, Israel wants to try to bring the polishing industry back to Israel.

In the past few years a lot of that part of the diamond industry has moved to India and China, where labor was cheap and the people were industrious. Israel, via the Israel Diamonds Manufacturing Association, has devised a plan to retake the industry, and their plan is by recruiting and training haredi men to work in this field.

Reuters (hattip to Joel on the article):

Diamond manufacturing is a dwindling trade in Israel. The country has one of the world's hottest diamond exchanges, but polishers and cutters of the precious stones have been replaced by cheaper workers in newer hubs like India and China.
Israel wants to bring them back. To do so, it plans on recruiting a legion of ultra-Orthodox Jews, who because of their dedication to prayer and study, have been unable or unwilling to join the work force, putting a heavy weight on the economy.
The job of a diamond polisher, however, is unique, said Bumi Traub, president of the Israel Diamond Manufacturers Association. It need not disrupt their pious lifestyle.
"The profession is fitting. You deal with the rock, and if you need to go pray, no one will bother you," he said.
The door to Traub's office requires a fingerprint scan. Security is tight in the four-building exchange where annual turnover of trading reaches $25 billion each year.
About a third of rough diamonds produced in the world each year pass through the Jewish state and diamonds account for more than a fifth of the country's industrial exports.
It was a natural sector to develop when Israel was founded 64 years ago, since the small stones have been choice merchandise for generations of Jews who had to quickly flee from riots and persecution.
The plan to revitalize manufacturing will cost millions of dollars and the diamond sector, for the first time, is turning to the government for help. The government, eager to get as many ultra-Orthodox working as possible, is on board.
"Once, everyone who sat in this room was a manufacturer," billionaire dealer Lev Leviev said at the opening of a Gemological Institute of America (GIA) laboratory in September. "There was not a diamantaire who was not a manufacturer, and over the years we lost it."
Salaries were just too cheap to compete with, he said, first in India, the world's biggest importer of rough diamonds, and later in China.
Israel has subsisted on larger, high-end stones whose owners pay more to have them manufactured close to home. But industry leaders hope to change that, in part because polishers in developing countries are demanding more money.
"I think we are there, more or less. With rocks of one carat plus, I think we are in a place where the (wage) gap doesn't justify running to manufacture abroad," said Sahar.
The GIA decision to open its lab in Israel was a first step. Manufacturers can now have their diamonds graded and evaluated in Israel rather than sending them to the United States.
"It's critical for the growth, for the international branding of the export business, and we think that we're a good partner to help the manufacturing grow," GIA President and CEO Donna Baker told Reuters when the lab opened.
By cutting costs and allowing increased turnover, it will add between $30 million and $50 million a year to the industry.
At the peak of manufacturing in the 1980s, there were 20,000 people cutting and polishing diamonds in Israel. That has dropped to about 2,000.
"There is no new manpower. Most polishers are 50 years old and up," said Roy Fuchs, who owns a factory a few minutes walk from the exchange. "If they don't invest and bring in new blood, there simply won't be manufacturing."
To make it happen, the industry realizes it needs help, and for the first time, it is looking for assistance.
"It's not easy. You need cooperation with the government," said Udi Sheintal, the Israel Diamond Institute's managing director. "Here in the middle of Ramat Gan, you don't get incentives. There are only incentives for certain populations, like the haredi."
The term haredi, which in Hebrew means "those who tremble before God", refers to people who strictly observe Jewish law. They dress in traditional black outfits, the men do not shave their beards and they spend their days in study and prayer.
Some 8-10 percent of Israelis are haredi. For the most part they live in insular communities, are exempt from mandatory military service and, according to the Bank of Israel, less than half of ultra-Orthodox men work.
The issue has created a rift in the mostly secular Israeli society and put a strain on an otherwise robust economy. The government has already earmarked $200 million over the next five years to encourage haredi integration in the work force.
Many in the new generation of ultra-Orthodox are open to the idea of getting jobs. The key is finding one that fits, said Bezalel Cohen, 38, who has worked for years to promote employment among his fellow haredis.
"The diamond industry's initiative (to hire ultra-Orthodox)has potential to really succeed," he said. "As long as the pay and training is proper, it should take off."
Aside from helping to pay the salaries for newly hired haredis, the government will offer grants to small exporters and marketing support.
The Trade Ministry's diamond controller, Shmuel Mordechai, said the government backs the idea and has funded similar programs in other financial sectors. It would have helped even earlier, he said, but the diamond industry was never interested.
"They lived in their bubble, they said, 'Don't bother us, don't help us'. In recent years, because of difficulties in the industry and because we opened up our tools to them, they understand," he said.
One of the more advanced plans Mordechai described is that of an independent service plant where dealers bring their rough diamonds. Such a plant would cost $1-$2 million and employ 30-40 workers. The government will help recruit the ultra-Orthodox.
"In any plant they set up here and bring employment, we will give help with salaries and other incentives," he said. "If two or three are set up, it will catch on. If the first one succeeds, others will follow."
Traub, from the manufacturer's association, intends to create dozens of new private factories. He has already spoken to leading rabbis in the community to win their support.
"I'm speaking of starting with hundreds and going to thousands of haredi workers," he said. "Manufacturing attracts clients. Barring a global crisis, I think we will grow at least 10 percent a year in export."

We need more initiatives like this, in various industries, and then we can begin to make a real dent in the problem. And I think that once people break out of their cycle and begin to lead better lives, and by better I mean financially better, education will be an easier problem to solve. People will be more open to educating their children, still within a haredi framework but they will want their kids to get at least the basics so that their childrens futures will be a bit brighter.

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  1. Good article, but why only Haredim? I think most people want a respectable job, but it usually takes a long effort during high school and university, or having family run some business to give you a short cut inside.
    Some IT companies did open up offices in not so central areas for Haredi women and train them to so certain tasks for low salaries, but this could also be under the 'affirmative-action' hat. Will they open the polishing centres in Harish and Beitar Illit? Haredi men, bypass high school, the army, and university, yet will get a course in diamond cutting so they can slip into an industry that is significantly more rich than IT. Is that fair? I wonder how they will manage this plan.

  2. the problem is more acute by the haredim, and they are the ones who need, en masse, a solution now.. maybe other people who are suffering from unemployment can take advantage at the same time and also get into these programs.
    Most people dont want to live a life of guaranteed poverty thinking that one day they might be able to slip in through a backdoor program.

    also, it is a way of "solving" a problem that is at a societal level. The general haredi society doesnt go to work. programs like these will begin to get them to change that culture, and perhaps will also eventually change their educational culture as well..


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