Israel’s Greatest Threat Is Not Security, It's Poverty

Prosperity in the face of conflict and the stress of 1,774,800 citizens living in poverty is simply not possible.

The world likes to believe that Israel's greatest concerns are security threats by its neighboring countries. But while the narrative of two ancient peoples in one Holy Land fighting over the same place is a great story, one which leads to an uncanny amount of headlines, extensive Untied Nations resources and energy invested into the area and more divisive discussions and actions than other much more bloody conflicts receive, Israel’s greatest threat is actually poverty.

Believe it or not, despite the growth of the Israeli economy and the country’s unparalleled success in high tech (known to many as the ‘Start-Up Nation’ phenomenon), about 25% of Israelis live in poverty.

Jerusalem poverty
Olivier Fitoussi

In November 2010, the National Insurance Institute released its latest Report on Poverty.

The report concluded that in 2009, 123,000 Israelis joined the "circle of poverty," and that 850,000 children and a growing number of working poor are now considered to be living below the poverty line. It is clear that poverty in Israel is spiraling out of control.

The gap between the rich and the poor in Israel is also growing rapidly as the middle class disappears. In 2009, Israel’s middle class made up only 15% of the population, a decrease of nearly 20% since the 1980s. And the figure continues to shrink. This is dangerous, if not deadly, to the Israeli economy. A healthy economy is represented by a large middle class of workers with buying power. The current situation and trend is unsustainable.

While some of the recent statistics were impacted by the global recession, it is far from the whole story. Israel had put conservative banking and fiscal policies in place long before the global crisis due to their own earlier troubles, so the global downturn did not hit Israel as hard. In 2007 the Israeli Central Bureau of Statistics showed that even when the economy was at its peak, great numbers of Israelis were falling from the middle class and struggling to put food on their tables. Yet the global recession is not to blame here. This is an older, more serious problem.

So, what is causing this increasing stratification of the ‘haves’ and ‘have nots’ in Israel? Is it the inability of young advancing couples to save enough to buy capital at 40% down? Is it the government's policy of encouraging a culture of unemployment in the ultra-Orthodox communities who receive stipends for studying? Is it paying more for every child born by-choice to unemployed families? Or is it an overly generous social welfare system that leads to people finding it easier to stay home and live off of welfare checks than heading back to work?

Instead of setting aside funds to keep the splinter political parties of the coalition happy, why doesn’t the Israeli government set aside funds for poor children who can't afford, but desperately want, a higher education and an opportunity at a career? Many poor kids drop out of school at young ages in order to feed themselves since they see few future rewards of even bothering to finish high school. A subsistence items market will not support a strong economy. Where can scholarship money come from? Or money for longer school days (school ends around 1:00 PM at public schools in Israel)? Or money for rehabilitation programs for teenagers that have no place to call home?
What is keeping the long-term unemployed at home instead of out in the workplace? Maybe this budgeting season the government should look into more welfare to work programs and providing vocational training.
Why are we bringing thousands and thousands of foreign workers into the country when we have hundreds of thousands of citizens out of work? Agricultural work and caring for the elderly may not be glamorous but choosing to stay home instead of working in these fields shows that there is a serious problem with the social welfare system, with the work ethic of Israelis and with the relevance and effectiveness of the educational system for the poor.

The founding of the modern State of Israel is the most important thing that has happened to the Jewish people in 2,000 years. We need to take a step back and realize that the ancient battles playing out today as "the conflict" is only half the story. The country’s domestic battles on the ground get fewer headlines but are just as dangerous.

Israel is a "Holy Land," but it is also a real state with the same social problems as every other developed country in the world. Prosperity in the face of conflict and the stress of 1,774,800 citizens living in poverty is simply not possible.

The government needs to adopt policies and make systemic changes and budget priority adjustments to prevent an economic crisis, while simultaneously attempting to hold a coalition government in place.

We are at the breaking point. The need for serious action by the government to reduce poverty is great, and with our nation’s rapid population growth the time is now.


Jackie Frankel is a Development Associate and the Youth Fundraising Coordinator for The Jaffa Institute (www.jaffainstitute.org), a private, non-profit organization that provides a host of social services to thousands of severely disadvantaged children and their families in the greater Tel Aviv-Jaffa area of Israel.