The revised budget for fiscal 2024, approved by the Cabinet,  includes a 15% cut in the 5-year plan (2021-2026)[1] to reduce socio-economic gaps between Jews and Arabs.[2] The program was budgeted at 30 billion shekels.[3]

The part of the program earmarked for increasing the integration of Arab youth (aged 18-35) into the job market, budgeted at 1.4 billion shekels over the 5-year period, focuses on two groups:  young men and women with high school educations or less, and young women with academic or other post-high school educations. To date, the program has initiated quality professional guidance, professional training, Hebrew language skills improvement, encouragement to work in high-tech, and the provision of incentives to employers to hire Arabs.[4]

Preliminary figures indicate that the program is succeeding; therefore, it is crucial to continue it in order to realize the potential of young Arab men and women.

According to Sami Miaari and Arnon Barak,[5]  there has been an improvement in the employment rate of Arab women in Israel, which on the eve of the present war was 44.8%, among others, due to the 5-year plan. However, that rate is lower than the employment rate of non-Haredi Jewish women — 83.2% in 2022.[6] As for Arab men, in 2023, their employment rate rose beyond the goal set for 2026. However,  that rate is expected to grow more slowly in the future, to 79% by 2030. As such, it is not expected to achieve the goal set by the government  (prediction by Miaari and Barak). [7] Thus, without continued financing of the program, the achievement will be even lower.

Employment Rates of Arab Men and Women, 2019 and 2023, and 2020 Goals of the 5-year Plan[8]

Budget cuts in the Employment Program for Arab women and men will result in perpetuating the gaps between Jews and Arabs; they also augur damage to the Israeli economy, especially in light of the reduction in the employment of Arabs since the outbreak of the war.[9]

Employment gaps between Arabs and Jews in Israel are significant. In 2021, the average wage of Arab men was 64% of the average wage of Jewish men, while the average wage of Arab women was 67% that of Jewish women.[10] This can be partially explained by the fact that Arabs’ representation in high-paying branches of the economy is very low. A prime example is the hi-tech industry, in which no more than 2% of employed Arab men were to be found in 2019, compared with 64% of employed non-Haredi Jewish men.[11]

The integration of Arabs into the employment market will improve the Israeli economy, as two-thirds of the growth potential of the GDP has been attributed to an increase in employment.[12]  Thus,  a rise in the total employment of Arab citizens and the quality of that employment will contribute both to the growth of the Israeli economy and to the narrowing of gaps in employment rates between Israel and other OECD countries.