Poverty Rate in Israel Fell in 2015, Especially Among ultra-Orthodox Jews

But report says percentage of poor Arabs rose even as more Arab women entered the workforce.

Lior Dattel
Lior Dattel
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Haredi Jews in Bnei Brak, Israel
Haredi (ultra-Orthodox) Jews in Bnei Brak, IsraelCredit: Uriel Sinai
Lior Dattel
Lior Dattel

Poverty in Israel showed a decline last year, especially among ultra-Orthodox Jews, as more Israelis entered the workforce and the government took steps to improve assistance to the neediest, the government’s National Insurance Institute said on Wednesday.

Its annual poverty report showed that the percentage of the population living under the official poverty line – which for a family of four was 8,086 shekels ($2,125) a month in 2015 – fell to 21.7% from 22% in 2014. The rate of child poverty fell to 30% from 31% in 2014 and among the elderly it declined to 21.7% from 23.1%, the NII said.

The exceptions to the general decline was in the poverty rates for families, which climbed to 19.1% last year from 18.8% in 2014 and for Israeli Arabs, whose poverty rate, already the highest in Israel, grew to 53.3% from 52.6%.

However, among Haredim, who also suffer unusually high rates of poverty, the NII said the rate dropped sharply, to 48.7% from 54.3%.

Prof. Shlomo Mor Yosef, the NII’s director, said he was optimistic that the decline in poverty would continue, citing among other things a scheduled rise in the minimum wage next month, 320 million shekels in extra allocations for allowances to the disabled and a plan to ease terms for income support for single mothers.

“With the help of measures taken in the past year and contained in the current Budget Arrangements Law, the trend of declining poverty will continue,” Mor Yosef said, but urged the government to take additional steps.

“It is critical to change the method for adjusting allowances so that they will increase in line with the rise in the standard of living and not just in line with inflation,” he said. “The increase in the minimum wage is contributing a lot to improving the social situation.”

On Wednesday the Knesset Finance Committee restored an allowance the government had been paying to ultra-Orthodox men studying full-time of 1,040 shekels a month and extended the benefits to needy students at secular institutions. The allowance had been rescinded a year ago after the High Court of Justice said it was discriminatory because it was given only to Haredim.

In any case, the poverty rate of ultra-Orthodox Jews has been dropping as more men forsake a life of study for the job market. Arab women, another group that has traditionally had a low labor force participation rate, have also been finding more and more employment. Wages for Arab men and women have been climbing, the NII said.

But even as poverty had been declining and employing rising, poverty among families with one breadwinner rose in 2015 to 25.9% from 25.4%, the report found. Even among two-income families, the rate rose to 5.6% in 2016 from 4.6% in 2001 and just 2% at the start of the 2000s.

In addition, Israel’s poverty rate continued to be much higher than the average for countries belonging to the Organization for Economic Cooperation and Development, who count among the world’s richest.

Before taking into account the impact of government allowances and taxes, the poverty rate in Israel was 26.8% in Israel, using the slightly different measure than the NII. That was two percentage points less than the average for OECD countries but still among the highest.

Where Israel fared particularly badly, however, was in the contribution of government assistance in combatting poverty. After taking into account allowances and taxes, Israel’s poverty rate dropped to 19.6% in 2015, but the average for OEC countries was just 11.5%.

The NII said inequality in Israel narrowed last year, with Israel’s Gini index declining 1.6%.

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