Economic consciousness

The protests of the summer of 2011 did not achieve all of its goals, but did bring about a change in consciousness.

Shekel money bills (photo credit: REUTERS)
Shekel money bills
(photo credit: REUTERS)
Five years ago this month, hundreds of thousands of Israelis from diverse backgrounds took to the streets to protest the unrelenting rise in the cost of living, particularly housing; the widening gap between rich and poor; and the growing number of people living under the poverty line.
The protests were unique in that for the first time in Israel’s short history, socioeconomic issues – not war protests or the Israeli-Palestinian conflict – motivated Israel’s citizens to demonstrate. Until the summer of 2011, the only protest comparable in sheer size was the September 1982 demonstration in Tel Aviv organized by Peace Now in the wake of the Sabra and Shatila massacre that was attended by 400,000 people.
The demonstration that served as the climax to the socioeconomic protests took place on September 3, 2011, attended by 450,000. A channel 10 poll taken a month earlier found that 85 percent of Israelis supported the activists. It seemed that the people of Israel had finally become what the first Zionists had intended them to become: a nation like all nations.
Israelis were no longer dominated by a constant battle for survival against enemies motivated by an irrational hatred of Jews. They could also take to the streets in protest against more mundane issues such as the price of cottage cheese. Israelis had “made it” just like other countries, their politics reflecting not only the constant worry over existential survival, but also a yearning for a comfortable life and a higher standard of living. No longer would Israelis acquiesce to the plea to delay gratification in the name of the more important battle for survival.
But did the impressive social activism really change anything? On one level it undoubtedly did: economic and social issues which had been neglected by Israeli politics for decades continue to capture public consciousness, and public discourse has shifted from a nearly exclusive focus on security and diplomatic policies to a more balanced view that includes socioeconomic issues.
No longer can a political party run for the Knesset on a platform devoid of a socioeconomic policy plan, as had been the case before the summer of 2011.
No political party that respects itself can ignore issues the housing crisis. The rise of Moshe Kahlon’s Kulanu party is a symptom of this change. So is Yair Lapid’s Yesh Atid party.
But on a more fundamental level, did the socioeconomic activism of 2011 achieve the goal of lowering the cost of living and reducing the gap between rich and poor? If the emphasis is on outcomes, than the activists still have not brought about the change they hoped for.
Despite attempts by consecutive governments, housing prices continue to rise. Since 2011, housing prices are up 28 percent according to the House Price Index provided by the Central Bureau of Statistics. Low interest rates are fueling the rise in housing prices, as investors search for more lucrative investments to replace the low returns offered by banks and the high risk of volatile financial markets.
But it is also a direct result of Israel’s high natural growth.
By 2048 the population in Israel is expected to double.
The present level of about 50,000 housing starts annually simply is not keeping up with the number of people being born. More needs to be done to streamline the building process in order to increase the supply of housing.
Food prices have also continued to climb faster than the rate of inflation. The concentration of market control in the hands of just a few food producers is the main cause for high food prices. Import reform for dry food goods known as the “cornflakes law” is expected to increase competition, but it is unclear whether this alone will be enough to undermine the dominance of a few large food producers.
Moreover, the gap between the rich and the poor in Israel remains one of the highest among developed countries.
Only the US, Turkey and Mexico have higher levels among OECD countries.
The protests of the summer of 2011 did not achieve all of its goals, but did bring about a change in consciousness.
Politicians cannot afford to ignore housing and food prices or the gap between rich and poor. Those who do risk losing their jobs.