Days of reckoning

It seems that the eve of the Days of Awe is a suitable time for the annual release of the NII's poverty report.

September 7, 2006 23:19
4 minute read.
Days of reckoning

Poorman88. (photo credit: Ariel Jerozolimski)

Poverty just doesn't seem to disappear from our ethical radar. Last week the National Insurance Institute published its annual report on poverty in Israel for 2005, showing a continued increase in the poverty rate. This marks the seventh straight year that this rate has been increased or unchanged. The poverty rate in 1998, only seven years prior, was 17.5% of individuals; last year it was 24.7%. Some of this increase is due to an increase in the median wage, but quite a bit is due to stagnation in the living standards of Israel's poorest families. Perhaps coincidentally, on Sunday I presented a seminar at the Central Bureau of Statistics discussing varying ways of measuring poverty - a frequent topic of these columns. Currently, the poverty rate in Israel is defined in the following way: any household whose income per person is less than 50% of the median income is considered poor. The per person income is calculated according to a formula which is meant to account for the fact that, as the old song has it, "two can live as cheap as one" (actually, as cheap as 1.6). Many modifications have been suggested to this system, some more radical than others. The tiniest tinker would be to keep the entire framework but just change the threshold. In Europe , they don't use 50%, they use 60%. This would greatly increase the number of poor people. (Even with their more inclusive measure, the poverty rate in Europe is far less than the rate here!). Slightly more adventurous is changing the way the threshold is calculated. For example, Canada doesn't adopt a pure relative standard like the one in Israel and Europe. Such a standard will show an increase in poverty even if all poor families are better off, as long as the median increases even more. Instead, they have a "market basket measure" and ask if family income is sufficient to acquire a "basket" of basic family needs. Tweaking matters a little bit more, we may want to consider someone deprived not if he or she has low income, but only if they have low consumption. Low income may be temporary or may be ameliorated by savings, but low consumption represents poverty. This approach is becoming more popular. We've mentioned a lot of different kinds of thresholds: income thresholds and spending thresholds, relative thresholds and absolute thresholds, and so on. One thing they have in common is that poverty is a characteristic of individuals. We go around our population and classify each individual as being either poor or not poor; the poverty rate is then determined by simply "reckoning the wretched". Recently, some researchers have suggested a far more revolutionary way of looking at poverty. Perhaps poverty is a property of societies, and not of individuals. This approach involves two related insights. One is that even at the individual level, if poverty is about deprivation, all individuals are deprived in some respects, and provided for in others. Another is that entire societies may be deprived. For instance, they may lack an effective system of justice, or adequate transportation. (A seminal paper on this topic was written by Flavio Comim and the late Wiebke Kuklys of Cambridge.) (The exclusive focus on material deprivation is also questionable. According to Aristotle, who preached the "golden mean", we should have two indices: a poverty index, counting those who are two poor, and a "surfeit rate", counting those who are too rich for their own well-being!) This is an appropriate topic of discussion for this time of year, since it parallels a fascinating confrontation in Jewish tradition. We are now in the Jewish month of Elul, which precedes the High Holy Days, the days of judgment. This month is traditionally set aside as a time for repentance. But what exactly is repentance? According to some thinkers, repentance is a property of wrongdoers. Any specific individual who has committed a transgression is bidden to repair his ways. But others, especially the early leaders of the Hasidic movement, asserted that repentance is a need and a characteristic of society as a whole, even of the entire universe. Everyone, and everything, falls short of its ideal in some way, and is bidden to repair and improve - that is, to repent. It seems that the eve of the Days of Awe is a suitable time for the annual release of the NII's poverty report. The timing reminds us that our repentance should include worrying about those many individuals who, according to the NII's accounting, have minimum means to fulfill their material needs. But at the same time we should consider the ways in which the other 75.3% of Israelis as individuals, and the entire Israeli commonwealth as a whole, could have their basic individual and social needs provided for in a more complete and equitable way. The writer is research director at the Business Ethics Center of Jerusalem (, an independent institute in the Jerusalem College of Technology. He is also a rabbi. [email protected]

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