More than 1 in 5 Israelis live in poverty, highest in developed world

When compared to other OECD countries, Israel still has the highest poverty rates of all developed countries.

A volunteer distributes food at a soup kitchen. (photo credit: ILLUSTRATIVE: MARC ISRAEL SELLEM)
A volunteer distributes food at a soup kitchen.
There are more than 1.7 million poor Israelis, some 21.7% of the population, according to the annual poverty report the National Insurance Institute, released on Thursday.
A total of 1,712,900 people, including 460,800 families and 764,200 children, live below the poverty line, according to the report, which is based on data gathered by the Central Bureau of Statistics for 2015, the most recent year for which comprehensive information is available.
The overall poverty rate decreased from 22% in 2014, while the proportion of families living in poverty increased from 18.8% in 2014 to 19.1% in 2015.
The proportion of children living in poverty decreased from 31% in 2014 to 30% in 2015 and among the elderly it decreased from 22.3% in 2014 to 21.7% in 2015.
A single-person household with a monthly income of less than NIS 3,158 and couples earning less than NIS 5,053 per month are considered to be living below the poverty line; whereas a family of five must earn more than NIS 9,475 to be considered above the poverty line.
Disposable median income per capita rose in real terms by 3.3% in 2015 over the previous year, as did the poverty line, according to the report.
The poor in 2015 became even poorer, the data indicate. The “depth of poverty index,” that is the average gap between the income of families living below the poverty line and the poverty line, increased by some 3.2% to reach 35.7%.
In families with one working person, the poverty rate increased from 25.4% in 2014 to 25.9% in 2015, while in families with two working people the poverty rate remained the same, 5.6%.
For families with children, the poverty rate decreased from 23.3% in 2014 to 23.2% in 2014.
The decrease was pronounced among single-parent families, as the poverty rate decreased by 13% to stand at 21.8% in 2015. However the depth of poverty among families with children increased by 4%, the findings indicated. Dr. Daniel Gottlieb, the report’s author and deputy director-general for research and planning at the National Insurance Institute, said this was most likely due to the increase in the level of monthly NII child allotments paid to families. They had been cut, and were returned to their former level in 2015.
The data also broke down the poverty rates of various population groups.
Among ultra-Orthodox families the poverty rate decreased from 54.3% in 2014 to 48.7% in 2015, accounting for 17% of poor families in Israel. The improvement, the report notes, was primarily due to the increase in income due to employment and the restoration of the child allotments.
The poverty rate for Arab families increased to 53.3% in 2015 from 52.6% in 2014, while the poverty rate among the sector’s children also increased, from 63.5% in 2014 to 65.6% in 2015.
Israel still has the highest poverty rate of any OECD country, the report noted. The GINI index of inequality showed a slight improvement, but the country continues to remain among those with the highest level of inequality.
Labor and Social Services Minister Haim Katz announced a new plan to deal with poverty ahead of the release of the report.
“National Insurance allotments should be linked to the average wage in the labor market,” he said.
Katz noted that, until 2002, allotments were linked to wages, following which they became linked to the consumer price index, even though the poverty line continued to be measured according to a person’s income.
“A situation has developed where we will never minimize the gap. This [linking allotments to the average wage] is a dramatic move that will help us fight poverty and will have an immediate impact on the elderly,” he said.
Katz said he would recommend that the government change the system to update the allotments so that they will be adapted to the increase in the general standard of living.
Despite his announcement, the plan has yet to be approved by the government and included in the draft state budget for 2017-18.
Meanwhile, MKs were surprisingly silent with regard to the findings of the report. As opposed to the past few years, when politicians from across the political spectrum would issue scathing criticism of the state of poverty, only a handful commented on the findings.
Opposition leader Isaac Herzog slammed Prime Minister Benjamin Netanyahu for the high poverty rates.
“Bibi continues to bring Israel to remarkable achievements in the international arena,” he wrote sarcastically on his Facebook page. “1.7 million people in Israel living under the poverty line. Thanks to you, Bibi, we have once again reached first place among the OECD countries.”
MK Itzik Shmuli (Zionist Union), a member of the Knesset Labor, Welfare and Health Committee, issued a statement saying the report shows that the state “utterly failed in dealing with poverty. In spite of all the declarations and promises, this report shows the poor have become poorer.
“The working poor are not able to escape their situation and Israel is still the leading country with the highest poverty rates in the Western world; this is a dismal failure and the government should be ashamed.”
Shmuli said that for “40 houses in Amona the entire government stands on its feet, but for two million poor people no minister says a word.”
He added that the government had yet to adopt the recommendations issued in 2014 by the Committee to Fight Poverty that was headed by MK Eli Alalouf (Kulanu).
Gidi Kroch, CEO of the Leket Israel food aid NGO, said that every year the poverty report presents the same statistics, “more or less. But let us not forget that behind these numbers are the same people struggling in poverty in Israel.”
“According to the report, Israel is the poorest of the Western countries and with the widest gaps between the rich and the poor. A situation where the weakest populations – the elderly and children – are suffering the most. This just does not fit with our Israeli culture and our Jewish identity. It is not our way,” he said.
Kroch, however, praised Katz and said that “there is a wind of change in the Welfare Ministry,” using the old name for the Labor and Social Services Ministry that Katz heads.
“The welfare minister has been pushing for changes, and food rescue is being included for the first time. The Welfare Ministry’s budget has grown exponentially and the minister’s focus is on the population most in need, the elderly,” Kroch said, adding there remains “much to be done.”