A total of 1.58 million people live below the poverty line in
Israel, including 25,000 children who joined the ranks of the
poor this year according to a report released by the National
Insurance Institute on Monday this week. Over one-third of
all children in the country lived in poor families in 2004,
while the number of elderly poor decreased due to the
increase in Old-Age Allotments. Currently the poverty line
has been set at NIS 3,700 (about $800) per month for a family
of two.
The National Insurance (Bituach Leumi) report, presented at a
press conference by Deputy Welfare Minister MK Rabbi Avrohom
Ravitz and National Insurance Director-General Yigal Ben-
Shalom, shows 34 percent (783,000) of all children in Israel
are poor—a 50 percent increase since 1998. The report
also reveals that 41 percent of poor families include at
least one wage earner (rising from 40.3 percent), refuting
the Finance Ministry's claim the reductions in allotments
would encourage more people to enter the job market.
During the past year 46,000 Israelis joined the poverty
ranks, and the total number of poor families rose to 403,000.
The poverty rate in the general population rose from 18.8
percent in 2000 and 23.6 percent in 2004, to its current
level of 24.1 percent.
Despite the alarming figures, National Insurance officials
say last year the rise in poverty decelerated compared to the
two previous years. The Director-General believes that
changes in government policy can still save segments of the
population that have not yet fallen into decline. "I have no
doubt that at this point we need to at least invest in
curtailing, if not stopping, the cutback in allotments," he
said. "We must invest in more education and welfare projects
for children. Otherwise we will lose these children."
According to the Genie Index, a measure of social equality,
the social gap in Israel has grown by another 1 percent. The
upper tenth's portion of available income (after paying taxes
and receiving allowances) continued to rise from 26.6 percent
in 2004 to 27 percent in 2005, while the bottom tenth's
portion rose from 1.7 percent to 1.9 percent. The upper tenth
has nearly 30 percent of all income although it represents
only 10 percent of the population.
"The erosion of the majority of allotments that the National
Insurance Institute pays," reads the report, "particularly
Children's Allowances, and the additional reduction in income
tax which benefits primarily the high-income earners, led to
a further reduction in the contribution of transfer payments
and direct taxes to the reduction of inequality in income
distribution." This contribution decreased from 31.5 percent
in 2002 to 26.6 percent in 2004/5. In 2005, benefits brought
only 17 percent of children above the poverty level, as
opposed to 25 percent of children in 2002.
In 2005, NII benefits other than those to seniors declined in
real terms by 2.5 percent, for a total decline since 2002 of
15 percent. The NII proposed that the cutting of child
allowances, which was to have stopped in 2009, be stopped
this year, and that benefits paid for each child be held
steady at NIS 170.
The substantial growth in poverty comes despite the fact that
the poverty line has remained almost unchanged in recent
years. Today the poverty line is defined as NIS 1,804 ($390)
per person in monthly available income or NIS 5,411 ($1,175)
for a family of five. In 2000 the poverty line was NIS 1,753
per person.
The main factors for the sharp rise in the number of Israelis
whose income falls below the poverty line is that National
Insurance allotments and other support funding are
insufficient to push them above the poverty line. This is the
effect of various transfer payment cutbacks made during the
Sharon government and the period during which Binyamin
Netanyahu served as Finance Minister all of which was touted
as the "new economic program."
Protesters representing the Union of Social Workers
demonstrated outside the Welfare Ministry in Jerusalem while
the report was being presented. "Every year the report is
published and nothing is done about it," said Chairman Itzik
Perry. "I would like to ask National Insurance to do
something very simple: stop publishing it to avoid creating
the delusion we are a smoothly functioning, enlightened
social welfare nation that gathers data—since nothing
is done with it anyway."
Commenting on the report—the worst ever—Rabbi
Ravitz said, "Every few months a reporter or politician
recalls that there is poverty in Israel and places it on the
public agenda. After a media-fest of one or two days, or
maybe three at best, including pictures of empty
refrigerators, people in soup kitchens and a few demagogic
statements from every direction, the story fades and the poor
are forgotten and return to their places on the fringe of
Israeli society.
"I view this phenomenon as exploitation of the poor for
personal and partisan aims and to draw ratings. In most cases
those who talk about this issue have no real intention of
delving into the problem of poverty or of offering genuine
solutions.
"Not only are people impoverished in Israel, but
unfortunately the public dialogue is impoverished and
superficial as well. This low level of social dialogue is the
level at which the Finance Ministry and those who call
themselves `economists' would like to see the issue remain.
This way they can continue to determine the economic policy
without any interference and really without any serious
discussion.
"The Welfare Ministry and the National Insurance Institute
never forget the poor. Here we do not do one-time festivals;
here there is no reason for festivities since we see the weak
segments of society face-to-face on a daily basis.
Unfortunately we feel shackled and unable to assist the way
we would like to assist the people who come knocking on our
doors. We analyze the situation and try to offer solutions,
but the economics people have more power than we do. The
numbers continue to cause concern and should make every
individual who fears for the social fabric in Israel feel
concerned."
Starting last year, National Insurance began publishing
statistics biannually rather than annually to make the data
as up-to-date as possible. This time the figures apply to the
second half of 2004 and the first half of 2005. According to
the report, the number of poor families rose from 394,000 in
the previous report to 403,000, or one in five.
In reaction to the figures the Finance Ministry remarked,
"The Government of Israel is aware of the problem of social
gaps. The Director-General of the Finance Ministry has been
instructed to head a team that will formulate a fundamental
plan to confront the problem. The seven-year, NIS 14-billion
[$3-billion] plan will focus on long-range tools and means,
including creating jobs, providing services to poor sectors,
investing in education, increasing the rate of participation
in the workforce and creating tools to remove obstructions
preventing people from going to work and encouraging
employment.
"The primary growth and the impact of the changes the
government introduced, focused on the second half of the
year. This is a positive trend, but the signs will only
become visible a bit later when the growth permeates every
segment of the population and the positive indicators and the
government's programs have an effect on the reduction of
poverty to a greater extent."
Acting Prime Minister and Finance Minister Ehud Olmert said,
"This is a difficult problem and it has been bothering me and
troubling me for a long time. The report applies to the year
starting in July of 2004 and ending in June 2005. My time in
office at the Finance Ministry began after the period covered
in the report. The figures are worrisome and cannot be taken
for granted. It was clear to me from the start we would need
to confront the issue of gaps and poverty in a more
comprehensive manner. I believe the next report will present
a different picture."
MK Rabbi Meir Porush said, "The economic policy, which
presents growth statistics in the economy, has effectively
left half a million citizens to lives of poverty in soup
kitchens. Only certain segments benefit from the growth and
they have widened the gap between themselves and the weak
segments. The citizens of Israel must adopt the
recommendations of President Moshe Katzav, who called on the
public not to vote in the elections for a party that does not
place poverty at the top of its concerns. But the citizens of
the nation should also punish the parties responsible for
creating the poverty rate—the largest among the world's
developed countries."
According to MK Rabbi Moshe Gafni, this week's report "could
bring the State of Israel to the bursting point and to a
social civil war. The heads of Kadima and the Likud who led
this ruinous policy are directly responsible for the
destructive results, which become worse from year to year. If
at the beginning of this path which is extremely anti-social
and neo-capitalist, they hid behind the difficult economic
state of the country now, after the number of terrorist
attacks has decreased, boruch Hashem, tourism has
grown, and world markets (which have a direct impact on the
Israeli economy) have recovered, they continue without any
changes to this policy [with its threat of] imminent
disaster. Unfortunately, history has proven that social gaps
which reach such alarming dimensions and are clearly lacking
in justice and equality in the distribution of resources in
the society lead to outcomes, chas vesholom, whose end
cannot be foreseen."
Shas Chairman MK Eli Yishai said, "The government has
transformed poverty into a deadly bacteria that paralyzes the
immune system. The government chose to eliminate the poor
rather than poverty."
