'Poverty, by America': Explaining poverty in Israel and the US - review

Each society goes about “manufacturing” poverty in its own way and high levels of poverty – whether in rich or less prosperous societies – are by no means inevitable.

 A HOLOCAUST survivor examines foodstuffs she received from a nonprofit aiding impoverished survivors, in Beit Shemesh.  (photo credit: RONEN ZVULUN/REUTERS)
A HOLOCAUST survivor examines foodstuffs she received from a nonprofit aiding impoverished survivors, in Beit Shemesh.
(photo credit: RONEN ZVULUN/REUTERS)

The recent celebration of Israel’s 75th birthday provided yet another opportunity to reflect on the Jewish state’s many stellar accomplishments since its founding. In areas such as hi-tech, water conservation, agriculture, and defense, Israel has done remarkably, even miraculously, well. Regrettably, however, Israel has been much less successful in other areas.

For instance, social fragmentation remains an enduring problem, and poverty rates remain high despite steadily growing affluence. Among the various groups highly vulnerable to poverty are Israeli Arabs, single-parent families, Holocaust survivors, and haredim.

Whether measured in absolute terms (an income sufficient to purchase only minimal levels of food, shelter, and clothing) or relative to the overall standard of living, many prosperous countries experience significant poverty levels. Today, Israel is unquestionably a prosperous country. Indeed, since 2010 Israel has been a member of the “club of rich countries,” namely, the Paris-based OECD. And yet at the end of 2021, the relative poverty rate stood at 21% of the country’s population (close to two million people), well above the OECD average. Among children, the rate was an astounding 28%. Similarly, the US, one of the richest countries in the world, has an overall poverty rate of almost 12% and a child poverty rate of over 15%. In contrast, other countries, well to do but less so than Israel, have markedly lower poverty rates. For example, Slovakia’s poverty rate of around 8% is below the OECD average.

How can Israel be a rich country but still have high poverty?

How can we explain the fact that there appears to be no necessary relationship between the degree of economic prosperity of a society and its level of poverty? The answer is captured in the title of Matthew Desmond’s latest book, Poverty, by America. The title implies what public policy boffins have long known; namely, that each society goes about “manufacturing” poverty in its own way and that high levels of poverty – whether in rich or less prosperous societies – are by no means inevitable. Further, societies differ in terms of the extent to which they will tolerate poverty.

The rabbinic definition of poverty conceives of it in both absolute terms (an income of less than 200 zuz – or less than 50 zuz for someone who is in business – in the context of a primitive economy) and relative to one’s previous accustomed economic situation. But however conceived, Judaism views poverty as a highly undesirable condition without any redeeming features. It is seen not only as having insufficient resources to meet basic needs but also as something which has adverse psychological impacts and is felt morally – a condition which is depressing, highly stressful, and humiliating. Indeed, in Poverty, by America, Desmond, with considerable passion and compassion and, at times, seemingly simmering anger, portrays both the dire material and the psychological impacts of poverty.

A beggar sits and asks for money amid the coronavirus crisis, Jerusalem, 2020 (credit: MARC ISRAEL SELLEM)
A beggar sits and asks for money amid the coronavirus crisis, Jerusalem, 2020 (credit: MARC ISRAEL SELLEM)

Prophetic Judaism views poverty as brought about not by the poor themselves due to such factors as idleness and lack of motivation but by the evils of the social order. Desmond similarly points to contemporary structural causes of poverty (for example, labor market restructuring, locational disadvantage, racism, and wage stagnation). These include, for instance, employers who exploit undocumented workers, landlords who overcharge for shabby housing, and payday lenders who reap exorbitant fees from those least able to afford them.

In view of the adverse psychological impacts of poverty, Judaism demands sensitivity to the plight of the poor.

In contrast to Judaism’s insistence that poverty alleviation be undertaken with compassion and tact, Desmond makes much ado of the emotional indifference to the poor by a very large segment of the US population, namely the beneficiaries of “invisible welfare.” Policy boffins have also long known that people whose incomes are well above the poverty line often derive the greatest benefit from the public purse. They do so in the form of a range of homeowner and other tax subsidies which, just like direct welfare payments to the poor, boost household income.

Like a good policy analyst, Desmond offers a wide range of strategies for alleviating poverty. Of particular interest is his description of the highly consequential income support policies that were adopted during the COVID pandemic. These have since been repealed, resulting in a marked uptick in the US poverty rate.

Desmond is an accomplished wordsmith, and one cannot help but be touched by his profound sense of concern for the suffering of America’s poor, his descriptions of which are very disturbing. His careful marshaling of evidence to support his arguments is very impressive. Indeed, the narrative component of his book runs 194 pages, while the footnotes run an additional 77(!) pages.

Where American and Israeli poverty diverge: Haredim

While Desmond’s analysis of poverty in the US will undoubtedly resonate strongly with many readers in other countries, there is one respect in which, at first blush, it may not with many Israelis. Unlike America’s poor, impoverished haredim are often seen as being poor by choice: A high proportion of haredi men opt out of employment to pursue a life of Torah study and, to boot, have large families. Those who make this argument overlook, à la Desmond’s analysis, government actions that have contributed to manufacturing haredi poverty through incentivizing remaining out of the workforce. Many haredim engaged in Torah study have become so heavily dependent on public support in the form of stipends, rent assistance, child subsidies, etc., that working is simply not worthwhile. This is the case for at least two reasons. First, many benefits cut out when men leave the yeshiva world. Second, successive governments have failed to insist that the haredi education system prepare its students for employment, resulting in only low-paid jobs being available to haredim with little, if any, secular education. Further, the steady expansion in exemptions from mandatory military service after 1977 has further encouraged haredim to remain in yeshivot for much longer than they might have otherwise. In contrast, in the formative years of the state, haredi labor force participation was much higher than now, and the haredi birthrate was significantly lower. In addition, haredim fought and died in Israel’s first wars.

Poverty, by America, then, serves to remind us of (1) the causes and consequences of poverty in the midst of affluence; (2) the role of untrammeled greed in compounding its dire effects; (3) the role governments play in attempting to address it; and (4) their role in helping create poverty in the first place.

It also reminds us that it is we, the citizens, who elect governments to do our bidding. The choice, then, of whether we want a government that will seriously try to address poverty and other pernicious social problems is in our hands. 

Poverty, by AmericaBy Matthew DesmondCrown304 pages; $28