In Israel, where modernity coexists uneasily with tradition, hand-wringing about the country's ultra-Orthodox Jewish minority is a national pastime. Cloistered in poor towns and neighborhoods, exempted from conscription into the military and surviving largely off government handouts, the black-hatted ultra-Orthodox, known as Haredim, have long vexed more secular Israelis. Now, in the wake of an Israeli Supreme Court decision, this perennial tension has escalated to new heights.

The immediate issue is a decades-old state policy of providing stipends to students who attend religious schools, called yeshivas. In June, the court declared those stipends illegal, citing discrimination against secular university students who don't qualify for such assistance. Last month, however, ultra-Orthodox lawmakers introduced a bill to reinstate the stipend. "The state sees a great importance in encouraging Torah study," says their proposal.

Opposition to the bill is fierce, as many Israelis believe that decades of welfare and draft exemptions have created a cycle of poverty and dependence among Haredim. "If they want to live in a ghetto, fine, but why should the state pay for it?" Yossi Sarid, a former education minister, told the Associated Press. The controversy has triggered street protests across Israel, and threatens to topple the coalition government of Prime Minister Benjamin Netanyahu.

This year the Jerusalem-based Taub Center for Social Policy Studies released a report showing that unemployment among ultra-Orthodox men age 35-54 is 65% and has tripled over the past three decades. Voluntary unemployment has become the dominant lifestyle choice for Haredi men. And even if there was a desire to work, Haredi schools leave students unprepared to function in a modern economy. Meanwhile, the ultra-Orthodox population is expected to double by 2022, to over one million.

While explaining the data to me recently, Dan Ben-David of the Taub Center asked, "When did Judaism become about not working?" The answer is a case study in unintended consequences.