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The National Insurance Institute's poverty report for 2008 shows that the poverty rate in Israel is still at the high level that Benjamin Netanyahu set in 2004 when he was finance minister, and the picture is expected to be the same for 2009. Despite appearing not to be newsworthy, the static nature of poverty is a development that reveals some of the fundamental trends in Israeli society and Israeli politics.

According to the report, Israel's 19.9 percent poverty rate is almost double the 10.6 percent average among countries belonging to the Organisation for Economic Cooperation and Development, which includes most of the world's leading economies.

Compared to them, Israel has the worst poverty rate and would be at the bottom in terms of government support for reducing the ranks of the poor. A high poverty rate is the essence of Israel's policy of privatization, which increased the scope of poverty by dismantling the welfare system.

The unchanging poverty rate also shows that the dismantling of the welfare state fully exhausted the potential increase in poverty, so now the privatization policy is concentrating on maintaining it at a high level.

Some find consolation in the myth that were the Arab-Israeli and ultra-Orthodox populations excluded from the statistics, Israel's poverty rate would be acceptable in the West. The NII poverty report, however, reveals that with regard to the ultra-Orthodox, for example, this statistical trick is another Israeli neo-liberal fallacy.

The report emphasizes both the growth of "the incidence of poverty among the ultra-Orthodox" and the growth of the proportion of "working poor," which is at odds with the overall stabilization of poverty rates.

The concurrent increase of poverty among the ultra-Orthodox and the working poor dispels the common excuse that ultra-Orthodox poverty is "poverty by choice," which can be escaped simply by getting a job. It exposes this as hypocrisy, which veils the role of the dismantlement of the welfare state and organized labor.

The data in the report shows not that ultra-Orthodoxy causes poverty but rather that poor people tend to become ultra-Orthodox, as the Shas phenomenon shows. The dismantling of the welfare state pushes the poor to seek help from ultra-Orthodox services. Embracing an ultra-Orthodox lifestyle in turn causes cultural changes among the poor, including an increase in the number of children in a family - which provides a justification for poverty.

The rise in the incidence of "working poor" and ultra-Orthodox poverty are therefore complementary aspects of the high, static poverty rate that characterizes the current stage of Israel's privatization policy. Therefore the common distinction between ultra-Orthodox poverty and general poverty is misleading, and artificially minimizes the scope of poverty, and justifies the neo-liberal policies that maintain it.

This distinction provides the basis for the existence of the ultra-Orthodox social services, created thanks to the dismantling of the welfare system, These social services ensure political support for the ultra-Orthodox parties.

So, for example, Shas promoted the Nahari bills, sponsored by Shas MK Meshulam Nahari, as a way of funding sectoral education and privatizing state education, among other things.

The distinction between general and ultra-Orthodox poverty are in the understandable interest of the right wing, which has championed the end of the welfare state. On the other hand, the support for this distinction from the left can be seen as one of the causes of its political degeneration and its disassociation from the lower classes.

Recognizing the economic causes of ultra-Orthodox poverty must make the left overcome its cultural reservations regarding various sectors of society where the lower classes were driven by the privatization policy. Instead, they should be viewed as allies in establishing a social democratic force to fight poverty through the establishment of a welfare infrastructure.

The writer is a lecturer at the University of Haifa.