Poverty report / The many faces of destitution

Every time the National Insurance Institute's poverty report is released, the question that arises is how much it actually represents the situation in the field. The tendency of economists, like Bank of Israel Governor Stanley Fischer, is to argue that the situation isn't as bad as the data show, while others, like social-welfare organizations, say reality is worse than the dry statistics.

In an effort to improve the resolution of this picture, the NII's deputy director general of research, Daniel Gottlieb, added several additional measurement tools to the report published yesterday.

For instance, the report examined the pay rate of the working poor, who constitute 46 percent of all impoverished Israelis. The report found that 63 percent of full-time employees earned an amount between the minimum wage (about NIS 3,700 a month) and the nation's average salary (about NIS 7,500), but nonetheless did not manage to rise above the poverty line.

Gottlieb also looked at how many poor families do get out of the poverty trap and how many are considered "chronic poor." He found that most of the poor families (57 percent) and individuals (61 percent) remain impoverished for many years.

Surprisingly, the statistics show chronic poverty is more widespread among Jews than among Arabs: 61 percent of Jewish families classified as poor in 2007 were considered chronically poor, as compared to half of the Arab families. Seventy percent of Israeli families with four or more children are considered chronically poor.

The report also shows how employment affects the extent of poverty. Among families headed by someone who works, 54 percent are poor for the long term, compared to 62 percent of families with an unemployed head of the household.

While the number of poor Israelis did decrease slightly in 2007, poor families became somewhat poorer: In 2006 the average income of poor families was 33.8 percent below the poverty line. Last year their average income was 34.3 percent lower.

The poorest of the poor live in families in which the head of the household does not work. In 2006 the average income of such families was 47.8 percent below the poverty line; in 2007, it decreased to 51 percent below that line.

The poverty line is defined thus: For a two-member family, it is a monthly income of NIS 3,350; for a five-member family, NIS 5,350 a month; and for a family of six, the income is NIS 7,100 a month.

Poverty has also expanded marginally in the north, where 32.4 percent of families were poor in 2007, compared to 31.5 percent the year before. In the south, the rate rose from 22.5 percent in 2007 to 23.2 percent last year.

Israel leads the developed world in the number of poor residents, according to the Paris-based Organization for Economic Cooperation and Development. In 2005, 19.9 percent of Israel's residents lived below the poverty line - a greater proportion than in Mexico (18.4 percent), Turkey (17.5 percent) or the United States (17.1 percent). And the rate in Israel is nearly twice as high as the average OECD poverty rate among its 30 member countries: 10.6 percent.

One reason for Israel's poor showing on the OECD chart relates to the country's high proportion of large families, says NII's Gottlieb. About a third of Israeli families have at least three children, compared to about 20 percent in most developed countries. Another reason is Israel's level of government support for the unemployed and the needy, which is one of the lowest in the Western world.