Olmert aims to cut poverty rate to 17.2%

The Prime Minister's plan also calls for growth in Israel's rate of employment over the next three years.

olmert poverty biz 298 (photo credit: Ariel Jerozolimski)
olmert poverty biz 298
(photo credit: Ariel Jerozolimski)
Prime Minister Ehud Olmert on Wednesday unveiled his plan to fight poverty in Israel, targeting increased employment as well as the creation of leverages for balanced, long-term growth as keys to his goal of bringing tens of thousands above the poverty line by 2011. "The goal of the program is to reduce the incidence of poverty among Israeli families to a rate of 17.2% by the end of 2010, compared to 20.2% today. In other words, an average annual reduction of 1 percentage point in the rate of poverty for the years 2008-2010," Olmert said at a press conference. "Upholding this goal will raise approximately 60,000 families above the poverty line, which comprises 240,000 individuals, including 115,000 children, and it will return the poverty rate to its level of a decade ago," the Prime Minister added. Olmert's plan also calls for growth in Israel's rate of employment over the next three years. Currently, approximately 68% of Israeli citizens between the ages of 25-64 are employed, far below the average of OECD (Organization for Economic Cooperation and Development) nations, a number Olmert believes will rise to 71% after the three years, resulting in the entry of over 92,000 people into the labor force and increasing the country's employment rates to ones maintained by OECD countries. Additionally, Olmert noted that, should the plan achieve its stated goals it would not only have far-reaching social implications, but according to estimates also would add 1.3%-2% to the gross domestic product and bring a significant addition to the State's income and lead to savings in allocation payments. "Finally there is a plan to combat poverty that has the right components and the right approach to achieve its goals," Roby Nathanson, director of the Microcenter for Political Economy, told The Jerusalem Post. "Never before has an Israeli government drawn up a four-year plan to combat poverty, but our research tells us that the way to attack poverty is by setting a long-term target, so hopefully we will see results." Nathanson cautioned, however, that a plan such as this one would not be easy to implement as at least a couple of billion shekels would need to be allocated to the project. "It's a matter of the government's budgetary priorities - the government needs to make a commitment to designate the necessary funds," he said. Although the program promises to maintain "fiscal discipline," Manuel Trajtenberg, head of the recently formed National Economic Council, the body that drafted the plan and which advises Olmert on economic decisions, said the Finance Ministry has yet to decide how much it is going to cost. Trajtenberg also noted that if the plan is not undertaken, poverty levels would decrease on their own, but at a much slower pace. Labor faction whip MK Yoram Marciano, meanwhile, slammed the plan saying that while it was important that the prime minister acknowledged Israel's poverty problem, the plan was short-sighted and would do little to alleviate the underlying issues facing the poor. In order to most effectively decrease poverty and increase employment, Olmert's "agenda" also proposes to gradually introduce an income tax credit for the poorest wage earners, enforce labor laws such as the minimum wage and overtime and reduce the number of legal foreign workers currently employed in the country since they compete with Israelis over jobs on the lower wage levels. In addition, the plan calls for the treatment of poverty among minorities - specifically haredim and Arabs - measures to help citizens obtain vocational training and subsidies for childcare to aid working mothers. Social Affairs Minister Isaac Herzog noted at the press conference that the only way for the plan to work is for government offices to agree to cooperate with one another for an extended period of time and work together with private organizations and the Histadrut. "It is our obligation to do so," he said. Sheera Claire Frenkel contributed to this report.