Poverty in Israel on the Rise Among Working Families, Despite Job Market Recovery

National Insurance Institute report shows more poor families with two or more breadwinners; Israel lags behind other OECD countries.

Talila Nesher
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Talila Nesher

Israel continued to lag behind other developed countries in its level of poverty and income gaps, according to the National Insurance Institute's annual poverty report, published on Thursday. A member of the Organization for Economic Cooperation and Development, consisting of the 30-odd richest countries, since 2010, Israel had 442,200 officially poor families in 2011 - a total of 1,838,600 people, of whom 860,900 were children.

Poverty levels among working families continued to rise, going from 19.4 percent to 20.0 percent based on their financial incomes between 2010 and 2011, and from 13.2 percent to 13.8 percent based on disposable income. This increase occurred despite a 2011 recovery in the job market.

The proportion of working poor families compared to all poor families of working age increased from 62.4 percent in 2010 to 64.8 percent in 2011. In 1999, slightly more than a decade earlier, about 7 percent of working families based on disposable income were considered poor, about half last year's 13.8 percent rate.

The report indicated a sharp increase in poverty in families with two or more breadwinners, which had for many years been considered immune from poverty: the rate grew from 2 percent at the beginning of the past decade to 4.6 percent in 2011.

The percentage of individuals and children living in poor families also increased: from 24.4 percent to 24.8 percent and from 35.3 percent to 36.6 percent respectively.

Most of the remaining poverty indicators remained close to their previous high levels: Quality of life based on median per capita disposable income remained virtually unchanged in real terms (up 0.2 percent), as did the threshold of poverty calculated from it.

In contrast, the long-term decline in poverty levels among the elderly continued from 2004's record 25.1 percent to 19.4 percent in 2011.

The extremely high level of poverty among families that did not work at all continued to go up: According to the NII report, it rose from 70.1 percent in 2010 to 70.7 percent in 2011.

The contribution of state allowances and tax policies to the reduction of poverty remained more or less unchanged: 39.3 percent of families considered under the poverty line in terms of their financial income were no longer in poverty in 2011 due to government policies.

While the poverty levels remained high and some even rose, the depth of poverty (the average gap between the official poverty line and the income of poor people) declined from 35.9 percent in 2010 to 34.7 percent in 2011, and the weighted index of the severity of poverty dropped about 4 percent.

Protesters prevent Social Affairs Minister Moshe Kahlon from leaving a press conference in which the results of the NII's 2011 poverty report were announced, Nov. 29, 2012.Credit: Moti Milrod

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