Study: One in five employees living in poverty

New report casts grim light on economic growth; number of poverty-stricken Israelis rising.

poor in garbage 298 AJ (photo credit: Ariel Jerozolimski [file])
poor in garbage 298 AJ
(photo credit: Ariel Jerozolimski [file])
While the Israeli economy is continuing to grow, the conditions of an overwhelming majority of the general public remain grim, according to a report by the Adva Institute published Saturday evening. The institute's study shows that the rich are getting richer and the poor remain poor, while the overall number of poverty-stricken people is constantly growing According to the study, the economic growth can be gauged by examining the country's top earners. The combined wages of managers in the top 25 companies traded in the stock market averaged four million NIS in 2003; in 2006 this figure rose to NIS 10.4 million. In contrast, salaried employees considered poor comprised 18.8 percent in 2006, an increase from 2004's 17%. Additionally, 32.7% earned minimum or lower than minimum wage in 2006 as compared with 2001's 29.2%. The main reason for the growth remaining unfelt in the lower-earning sectors is its unbalanced character. The sectors that developed most in the past few years were Hi-Tech and financial and business-related services. The yield of traditional industries, where most employees earn lower salaries, has decreased. While the report states that unemployment is diminishing, it points to serious gaps between the periphery and the financial centers. Unemployment in the Arab sector remains very high and provides some of the country's grimmest figures, with one village reaching a 20.9% unemployment rate. Meanwhile, the highest percentage of unemployment in Jewish communities was 9.4%, reported in Kiryat Malachi. The country's lowest unemployment rate was measured in the upper-class towns of Savyon and Ramat Efal, both enjoying unemployment rates as low as 0.5%. Gaps in the education system were also widening. In 2006, 45.9% of teenagers were entitled to receive a matriculation degree, a drop from 2004 and 2005's 49.2% and 46.4% respectively. Further, 13% of youths who did hold a matriculation degree still did not withstand the minimal basic requirements of higher education institutions. 56% of matriculation diploma holders from top earning families were accepted for higher education institutions, compared with a meager 10.3% of those in the lowest earning sector. Dr. Shlomo Savirsky, the author of the report, said that "the fact that the fruits of growth are held by only a few is good testimony of the processes at work in Israel. Wealth grows this drastically only in the United States. In European countries and in Japan these things don't happen. "Our politicians have abandoned the social emphasis in their policy, and say that the [economic] growth solves everything. In fact, the growth increases inequality. We can close gaps only by investing in health, education, social security and enforcement of labor laws." Savirsky added that the plight of the poor is unlikely to be solved in the coming year. "Regrettably, the 2008 budget is of a type that reinforces the [negative] directions pointed in the report," he said.