Report: Israel has highest poverty rate among OECD countries

Israelis do not have much confidence in their financial institutions with a rate of 38 percent compared to the average OECD rate of 46 percent.

March 18, 2014 22:16
2 minute read.
OECD meeting in Paris

OECD 370. (photo credit: REUTERS)


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Israel has the highest poverty rate among countries in the developed world, according to findings released Tuesday by the Organization for Economic Cooperation and Development.

The report, “Society at a Glance 2014,” warned that despite a gradually improving global economy, income inequality and social divisions could worsen unless governments act to improve conditions for the underprivileged in society.

According to the findings, Israel maintains a poverty rate of 20.9 percent – nearly twice the OECD average of 11.3%.

Despite this statistic the document said that 9.3% of people in Israel reported they could not afford to buy enough food, a rate that falls below the OECD average of 13.2%.

The report further stated that Israel is among the countries with the highest income inequality, surpassed only by Chile, Mexico, the US and Turkey as measured by the Gini coefficient.

The richest 10% in OECD countries earn, on average, 9.5 times that of the poorest 10%. In Israel, the richest 10% earn nearly 14 times that of the poorest 10%, the report indicated.

The annual household disposable income in Israel stood on average at $18,500 while the bottom 10% of society stood at $3,600 compared to an OECD average of $23,100 and $7,100 for the bottom 10%.

The report found that confidence in the government in Israel stands at 37%, lower than the OECD average of 43%. Though, since 2007, public confidence in the government has grown at nearly the fastest rate in the OECD, second only to the Slovak Republic.

Furthermore, Israelis do not have much confidence in their financial institutions, with a rate of 38% compared to the average OECD rate of 46%.

Despite the report’s warnings, Israel continues to maintain a lower social spending rate of 15.8% of GDP compared to the OECD average of 21.9%. Nevertheless, social spending measured in real terms increased significantly more than the OECD average in the period between 2007/08 and 2012/13.

The report highlighted a few positive points. Between the “first crisis years” of 2008 and 2011 fertility rates increased in less than one-third of OECD countries, among them was Israel.

In 2011, Israel had the highest fertility rate in the OECD by a considerable margin, of 3.0 children per woman, compared to the OECD average of 1.70.

As such, for every 5.2 people of working age there is one person over the age of 65, compared to the OECD average of 4.2.

In addition, the employment rates in Israel marked an increase of eight percentage points in the period between 2007 and 2013, the highest increase among the OECD countries.

Meretz chairwoman Zehava Gal-On expressed deep criticism of Prime Minister Binyamin Netanyahu and Finance Minister Yair Lapid on Tuesday.

“The report is a certificate with a failing grade for Netanyahu and Lapid, and illustrates how the policies of the Israeli government are detached and designed to serve the tycoons and the wealthy,” she said. “All the big plans of the government to reduce poverty and gaps in Israeli society have brought about only one outcome, the downgrading of tens of thousands of families below the poverty line and the crushing of the Israeli middle class.”

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