Analysis / The Bibi Poverty Trap

Netanyahu doesn't stand a chance - his name has become synonymous with poverty. But might poverty possibly date back from before Netanyahu took office?

For the past 30 years, until 2003, Israel conducted a policy different from that of Netanyahu. The state invented "guaranteed income," "unemployment insurance" and "child allowances," and made sure that all these budgetary items grew. In 1980, only 10,000 families were receiving guaranteed income supplements. By 2003, that number was 155,000. By 2001, every fifth and subsequent child was receiving a monthly allowance of NIS 855.

Yet despite the huge increase in benefits and welfare expenditures, poverty did not decrease; it grew, along with the gap between the rich and the poor. Poverty, therefore, is not new. It's been with us for a generation already.

The moment guaranteed income supplements increased and various benefits were added, the desire to work plummeted. Large child allowances encouraged weaker families to produce more children. As families grew, they descended deeper into the "poverty trap."

Let's take a family living in 2003 on guaranteed income. The state gives this family benefits in the amount of NIS 3,447, which is more than minimum wage, NIS 3,335. That family also receives rent assistance from the Housing Ministry, a discount in city taxes, an exemption from paying the TV license fee and a discount on public transport fares and on payments for kindergarten and to HMOs. So it wasn't worthwhile for the family to work. It lived in poverty, at the expense of the public.

By 2002, the budget could not stand the strain. Taxes could not be raised further, especially when poverty figures were not declining, but rising. It was Silvan Shalom who began to turn the rudder when he cut guaranteed income and child allowances. But who remembers?

Then came Netanyahu, who turned the wheel even more sharply. He chopped child allowances, brought down guaranteed income, and tightened unemployment benefits. He encouraged people to work by decreasing income tax and sending the foreign workers away.

But the numbers show that on Netanyahu's watch, too, poverty continued to grow, at an alarmingly faster rate. The reason is that we are now in the midst of a painful stage. The patient has undergone surgery, but has not recovered. Not everyone who lived on benefits found work. True, 140,000 Israelis joined the labor force in the past year and a half, but that is not enough, and some of them are unskilled laborers earning too little.

The solution, therefore, is in rapid growth that will create jobs, a demand for workers and a concomitant rise in pay. The government has to invest more in job training (the Wisconsin Plan). Disengagement and the continuation of the peace process will increase investments.

Of course, seniors, the handicapped, and those who cannot work must receive more government assistance. That is the social obligation all of us have to bear.