Poverty in J'lem 370.
(photo credit: Marc Israel Sellem)
No one wants to find their country atop a list measuring poverty, even if it is
only in comparison to the rich countries that inhabit the OECD. But what does
the Organization for Economic Co-operation and Development’s poverty measure
The OECD uses a measure called “relative income poverty” when
discussing poverty rates. The key word is “relative.” Poverty can be measured at
absolute levels, defined as those living under a certain subsistence threshold,
or on a social level, where it is defined relative to the rest of the
Unlike developing countries, where poverty might mean lack of
access to food, water, shelter, medicine and other basic survival necessities,
OECD countries tend to have little absolute poverty, so the relative definition
is far more useful.
Relative income poverty is defined as “the share of
people having less income than half the national median income.” If you split
the population right down the middle according to their income, and looked at
how much the person in the very middle made, you’d get the median. Anyone making
less than half of that person’s income would be considered below the poverty
Because relative income poverty actually measures inequality – not
the ability to survive at some standard of living – Israel’s score actually says
more about the income distribution in the country than the condition of those
living below the poverty line (and, of course, how it measures up to other OECD
countries’ income distribution).
For example, Israel’s Arabs and
ultra-Orthodox tend to be far poorer than the rest of the population. But as
reported, a study by budget expert Momi Dahan found that if you take
those poor groups out of the population, the number doesn’t change as
dramatically as one might expect – it falls from about 21 percent to 16.6%.
Taking the poorest people out of the equation changes the poverty line because
it’s all relative anyway.
The OECD study found that if it measured
poverty according to where the line was in 2005, the poverty level in Israel
would have dropped 1% from 2007 to 2010, the years covered in the
Looking at the Gini coefficient, a more common measure of
inequality, the country still wasn’t in great shape in 2010, but it was ahead of
the United States, Turkey, Mexico and Chile.
According to the Finance
Ministry, since 2010 Israel’s Gini coefficient has started to come down
That should only bring mild comfort to those concerned for the
lower classes in Israel. For one, many do struggle to get by, and could
certainly be classified by a more absolute indicator of poverty. For another,
income inequality is a very real socioeconomic problem.
searching for solutions to the difficult issue of poverty, getting the measures
wrong is a surefire way to miss the point.