In poverty report, Arab sector sees improvement, while haredi sector gets poorer

The NII report further found that couples with two children whereby one parent works full time and the other works part time, both earning minimum wage, will not be able to escape poverty.

December 16, 2014 17:14
Israel Poverty

Report shows that poverty in Arab sector is decreasing while it is inscreasing in the Haredi sector. (photo credit: REUTERS,JPOST STAFF)

The proportion of Israelis living in poverty declined in 2013, though the country still ranks near the bottom of the OECD, according to the National Insurance Institute’s annual report, released on Tuesday.

The poverty rate declined from 23.5 percent in 2012 to 21.8% in 2013, according to the report, which is based on Central Bureau of Statistics data.

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The percentage of families living in poverty declined from 19.4% in 2012 to 18.6% in 2013, and the percentage of children living in poverty declined from 33.7% in 2012 to 30.8% in 2013. The poverty rate among the elderly also decreased, from 22.7% in 2012 to 22.1% in 2013.

These percentages represent some 1,658,200 million people living in poverty in 2013, among them 756,900 children and 432,600 families.

This was a slight improvement from 2012, when 1,754,700 Israelis, including 817,200 children and 439,500 families, were defined as poor.

“Overall we are looking at a downward trend, but there are significant numbers that we as a country must address,” Prof. Shlomo Bar Yosef, head of the NII, said upon presenting the report.

The decline in poverty was primarily due to increases in employment and in wages, the NII said.

The employment rate among men increased from 72.4% in 2012 to 79.6% in 2013, while among women the employment rate increased from 64.6% to 70.3%.

These increases were able to offset the effect of the government cut in child allotments in August 2013, which the NII estimated would have raised the poverty rate.

However, the report’s author, Dr. Daniel Gottlieb, deputy director-general for research and planning at the NII, added that since the child allotment cutbacks were implemented only in the middle of the year, their full effect on the annual statistics will be reflected only when the statistics for 2014 are available.

Disposable median income per capita rose in real terms by 4.4% in 2013, as did the poverty line.

An single person with a monthly income of less than NIS 2,989 and couples getting less than NIS 4,783 per month are defined as living below the poverty line, whereas a family of five must have an income of more than NIS 8,968 to be considered above the poverty line.

The report further found that many families earning minimum wage are still below the poverty line. For example, couples with two children, where one parent works full time and the other works part time, both earning minimum wage, are defined as poor. Even with both parents working full time and earning minimum wage, they will only be able to escape poverty if they have fewer than four children, the report said.

Despite this, the poverty rate among working families decreased from 13.8% in 2012 to 12.5% in 2013, due primarily to a second parent joining the workforce. The proportion of families with two working parents increased from 45.7% in 2012 to 50% in 2013.

While among the unemployed or those facing difficulties in finding employment, the poverty rates worsened, increasing some 7 percentage points, from 66.1% in 2012 to 72.9% in 2013.

The poverty rate among the Arab population declined by some 7 percentage points, from 54.4% in 2012 to 47.4% in 2013. This was attributed primarily to an increase in employment, especially among women. Despite the improvement, families from this sector were still roughly 3.5 times more likely to be under the poverty line than Jewish families, the report found.

In contrast, the poverty rate among the ultra-Orthodox increased to 66% in 2013 from 60% in 2012. The report attributes this to a lack of increase in employment, low earnings, and the government cutback in child allotments.

When compared to other OECD countries, Israel still has one of the highest poverty rates, ranking third worst after Mexico and Chile, the report noted. In addition, the GINI index of inequality indicated that while Israel’s standing improved, the country continues remains among those with the greatest level of inequality, after Chile, Mexico, Turkey, and the US.

“It is very surprising to see that, in a year when child allotments were cut, the cost of living increased, and the VAT increased, there was a reduction in the national expenditure on health and welfare and the government continued its anti-social policies, a report is published citing a decline in poverty,” Eran Weintraub, CEO of the Latet NGO, said.

“Maybe we do not need the Alalouf Committee, we do not need the plan to fight poverty, and we can simply continue to lower allotments and increase cutbacks and the situation will improve by itself by magic,” he said sarcastically.

Weintraub questioned the validity of the government reporting on poverty, when it is supposed to address and take care of the issue – especially with the general election around the corner.

He said that the 2014 figures gathered by his organization, which are set to be published in a few days, reflect a very different picture of the state of poverty in Israel: one in which poverty rates increased and the level of poverty deepened.

The full effect of the cut in child allotments has yet to be fully reflected in the poverty rate statistics, he also said.

“We will note that even after the drastic decrease in poverty rates in Israel, they are still double the [average] rate of the OECD and Israel takes one of the last slots on the list,” Weintraub concluded.

Dr. Yitzhak Kadman, head of the National Council for the Child, also criticized the NII report.

“We should welcome every child who rises above the poverty line, especially the thousands who do so, even if they are too few and too many are left behind,” Kadman said.

“Still, the new data do not give cause to celebrate. Still nearly every third child in Israel lives under the poverty line, and many of the children above it are too close,” he said.

Kadman added that without a serious national multi-year plan detailing how to lower the poverty rate to below 20%, there is no reason to be proud of the data, which go up or down by a few percentage points every year.

Nissim Zioni, founder and CEO of Pitchon Lev, echoed Kadman’s sentiments and said: “I believe that the key to real change lies in the return of responsibility for poverty from the NGOs back to the Israeli government, by the enactment of a law which would require the government to establish a body to coordinate national treatment of the problem of poverty and carry out a multi-system and multi-year poverty reduction plan.”

Rabbi Yechiel Eckstein, founder and president of the International Fellowship of Christians and Jews, said in response to the report that “Israel is in the midst of a social crisis.”

“On March 17 when we go to the polls we have to demand change, we have to demand that the weakest in society are placed at the top of our priorities,” he said.

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