Jerusalem poverty levels persist despite increased employment

In recent years, Jerusalem has been enjoying a steady increase in both tourism and business, but the fruits of that success have not had a notable impact on the poorest population groups.

June 2, 2019 13:26
3 minute read.
Jerusalem poverty levels persist despite increased employment

Jerusalem College of Technology students at work during the May 2019 hackathon. (photo credit: MICHAEL ERENBURG)


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While 45% of Jerusalem’s inhabitants remain below the poverty line, an increasing number of Arab women and ultra-Orthodox Jewish men in the city are entering the labor force.

According to a recent report by the Jerusalem Institute for Policy Research (JIPR), an independent think tank focused on challenges faced by the capital, 77% of Jerusalem’s Arab citizens and 25% of Jewish citizens live in poverty. Some 40% of the Jewish population below the poverty line are ultra-Orthodox.

The figures are significantly higher than elsewhere in Israel, where 21% of all citizens live below the poverty line (50% of Arabs, 14% Jews). In other major cities, rates of poverty are far lower, with 7% of Tel Aviv residents and 14% of Haifa residents recorded as living in poverty.

The average wage in Jerusalem – where there are huge gaps between the east and west of the city – is far lower than elsewhere in the country, according to data gathered in 2016. An average monthly wage in the capital city stood at NIS 8,700, compared to the national average of NIS 10,500.

Recent trends, however, show significant increases in the labor force participation rate among both ultra-Orthodox Jewish men and Arab women – two population groups that have traditionally remained outside the labor market.

Between 2014 and 2017, the rate of employment among Arab women of working age in Jerusalem increased from 18% to 27% – a significant increase of 50% within four years. This still remains low compared to the national participation rate, where 37% of Arab women are employed.

“This is a positive trend, but it’s still a very small change and there is still a huge gap when compared to Arab women across Israel,” Yamit Naftali, head of economic and international research at JIPR, told The Jerusalem Post.

Much of the increase is attributed to the modernization of Arab society in east Jerusalem, lower fertility rates and improved access to west Jerusalem, but Naftali cites a lack of childcare and poor Hebrew language levels as continuing barriers to greater employment.

The participation rate of ultra-Orthodox Jewish men has also risen steadily during the same period, rising from 41% in 2014 to 49% in 2017.

“Over the last 10 years, the government has put a lot of effort and resources into trying to push these populations into the labor force,” said Naftali. “The most impactful measure introduced by the government was to reduce the stipends received by haredi men, and childcare benefits for their children. This population was forced to go to work.”

In recent years, Jerusalem has been enjoying a steady increase in both tourism and business, but the fruits of that success have not had a notable impact on the poorest population groups, Naftali said.

In 2018, the city registered a record number of guests across more than 10,000 rooms in 89 hotels, welcoming almost 1.8 million visitors and nearly five million overnight stays. The city is also home to approximately 3,100 Airbnb apartments and private rooms.

The number of active hi-tech businesses in Jerusalem increased by approximately one-third (33.8%) in 2017, a quicker rate of growth than Tel Aviv (27.1%). Taking into account businesses established in 2012, the city also boasts a significantly higher survival rate (62%) than the Israeli average (50%).

“When talking about the city’s economy, you also need to talk about the city’s population. There are still huge gaps between east and west Jerusalem, and the poverty rate is not improving,” said Naftali. “Even if you see the increases in hi-tech and tourism, the ultra-Orthodox and Arabs are not really participating in these celebrations. For economic development, we need to try to integrate them into hi-tech and other professional jobs.”

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