Nearly 100,000 Israelis joined the ranks of the poor in the past year. More than half of them, 55,000, were children. This brings the number of children living under the poverty line to 35.2 percent of all Israeli children, a record for the developed world.
Poverty increased mainly with four or more children, in families where the head of the household is employed and in Arab families. The figures are included in the poverty report for 2005 issued yesterday by the National Insurance Institute (NII).
Advertisement
The number of Israelis under the poverty line reached 1,630,500 in 2005, 24.7 percent of the total population. Children comprised 768,000 of this number, rising from 33.2 percent of all Israeli children in 2004 to 35.2 percent in 2005.
The number of poor families increased by 16,500 to reach almost 411,000, or 20.6 percent of all families in the country compared to 20.3 percent the previous year. The percentage among Arab families increased from 49.9 percent to 52.1 percent. Among Jewish families the poverty rate remained steady, at 15.9 percent. Poverty was highest in Jerusalem, with nearly 42 percent of all residents and 56 percent of children were poor, and in the north of the country, at 32 percent overall and 40 percent of children.
The sharp increase in the number of children under the poverty line - up by 55 percent since 1998 - was also seen in the steep rise in poverty among families with four or more children. In 2005, 58.1 percent of large families in Israel were under the poverty line, compared to 54.7 percent in 2004.
The NII attributes the rise to successive cuts in child allowances, which in 2005 reduced the incomes of large families by 12 percent and families with two children by six percent. The allowances pulled only 14 percent of children out of poverty, compared to 19 percent the previous year.
"The children who are poor today will be the recipients of support payments in the years to come," NII head Yigal Ben-Shalom said when he presented the report. Ben-Shalom called on the government to initiate a program to reduce the percentage of poor children from 35 percent of the total to 15 percent within a decade by adding NIS 1 billion in allowances annually.
Ben-Shalom said the Finance Ministry is prepared to increase allowances across the board to NIS 200 per child per month, at an annual cost of NIS 800 million. He said this would mainly help families with two or three children or young Arab or ultra-Orthodox families.
Leah Achdut, Deputy Director General for Research and Planning at NII, who wrote the report, finds proof that increasing allowances reduces poverty in the fact that last year the government increased old-age allowances, and the percentage of old people who are poor dropped from 25.1 percent to 24.4 percent. Achdut expects the figures for 2006 to reflect an additional fall in the poverty rate among the elderly.
Despite overall economic growth, the percentage of poor families in which the head of the household was employed increased from 11.4 percent in 2004 to 12.2 percent in 2005, from 160,000 families to 177,000 families. The percentage of poor families among families with workers increased from 40.6 percent to 43.1 percent. Nearly 60 percent of the working poor held full-time jobs. The only improvement was among families with two wage-earners: their representation among the poor dropped from five percent to 4.8 percent.
Increased wages in other fields
The explanation for the rise in poverty despite the general improvement of the economy lies in the fact that real wages increased only for those with higher education working in sectors such as banking, insurance and electricity. In sectors such as hospitality and textiles, for example, wages dropped by half a percentage point.
In 2005, the income of the lowest decile rose (by 5.2 percent), which the treasury points to as proof that economic growth has begun to trickle down. But the NII attributes the change to the entry into the workforce of a second earner rather than to an increase in salaries. In any event, the increase in the income of the top decile was greater, at 7.1 percent.
Defense Minister Amir Peretz said in response to the release of the report that he will make sure that the financial demands of the military establishment do not come at the expense of the resources needed to reduce economic equality.
Haaretz.com, the online edition of Haaretz Newspaper in Israel, offers real-time breaking news, opinions and analysis from Israel and the Middle East. Haaretz.com provides extensive and in-depth coverage of Israel, the Jewish World and the Middle East, including defense, diplomacy, the Arab-Israeli conflict, the peace process, Israeli politics, Jerusalem affairs, international relations, Iran, Iraq, Syria, Lebanon, the Palestinian Authority, the West Bank and the Gaza Strip, the Israeli business world and Jewish life in Israel and the Diaspora.
