Israel's Socioeconomic Panel to Shift Focus From Middle Class to Poor

Prof. Manuel Trajtenberg and his team of experts will deal with low-income groups that would benefit the most from reforms.

Eran Azran
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Eran Azran

The committee tasked with forming a new socioeconomic policy in response to the tent protesters is likely to focus on lessening the burden for the fifth decile of households and lower.

The fifth decile is considered lower-middle class, meaning that the middle class and upper-middle class leading the protests are unlikely to be the main beneficiaries.

Prof. Manuel Trajtenberg.Credit: Tomer Appelbaum

Sources close to the committee, headed by Prof. Manuel Trajtenberg, said yesterday that in meetings last week, the parties concluded that lower-income groups should benefit the most from reforms.

The committee's recommendations, these sources added, will primarily address the high living expenses facing the lower deciles.

These people are the main ones suffering from the high price of items such as housing, food and transportation, the committee reportedly believes.

However, a spokesman for the committee said it had not yet discussed these matters.

Poverty levels and social gaps in Israel are among the highest in the developed world.

According to the Central Bureau of Statistics, the fifth decile has a net monthly income of up to NIS 9,979 and average expenditures of NIS 8,875.

Net income is the after-tax income of all wage earners in the household.

While there is no clear definition of middle class, it is generally taken to mean the fourth through the seventh deciles, or households with net incomes of between NIS 7,257 and NIS 12,581 (in 2009 shekel values ). Sometimes the eighth decile is also considered middle class. This decile has an average monthly income of NIS 15,049.

Another accepted definition of the middle class applies to households whose monthly income ranges from 75 percent to 125 percent of the country's median household income.

The median net household income in 2009 was NIS 8,229 a month. So, by this measure, middle-class households have net monthly incomes of between NIS 6,171 and NIS 10,286.

These considerations mean that the committee's recommendations will not apply to the upper-middle class, meaning households with net monthly incomes of between NIS 10,000 and NIS 15,000.

The Central Bureau of Statistics found that in households under the fifth decile, monthly expenditures are significantly higher than monthly income. In contrast, households in higher income brackets manage to save.

Households in the first or second deciles spend between NIS 1,445 and NIS 3,250 more than they earn every month. For the fourth decile, this figure is NIS 500.

Households in the fifth decile save an average of NIS 160 a month, while those in the ninth decile have savings averaging NIS 3,888 a month. In the top decile, monthly savings are NIS 11,000 on average.

The two lowest deciles spend 35 percent of their monthly income on housing. For the fifth decile, the figure is 32.

The bottom deciles spend 22 percent of their income on food. The figure is 16 percent for higher deciles.

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