Working Poor Represent Israeli 'Growth Sector,’ Bloomberg News Says

High poverty and income inequality are denting the economy’s good reputation, the news agency adds.

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An impoverished woman searches for vegetables in Jerusalem garbage.
A woman searching through garbage in Jerusalem. Israel has the worst poverty in the OECD. Credit: Olivier Fitoussi

Israel’s economic reputation may go beyond that of the startup nation: News agency Bloomberg has devoted an entire analysis to Israel’s growing class of working poor.

“Hit hard by the rising cost of living and falling wages, the number of employed and impoverished Israelis has risen steadily even as the economy outran the U.S. and Europe in recent years,” notes Bloomberg, adding that at 20.9% of all households, Israel’s poverty rate is the highest among the 34 OECD nations.

“[The working poors’] plight is upending ideas about poverty in Israel, traditionally seen as a function of joblessness among Arab citizens and ultra-Orthodox Jews,” says Bloomberg. “The high poverty, combined with income inequality that ranks fifth in the OECD, is dimming some of the economic luster of the country that inspired ‘Start-Up Nation,’ a book by Dan Senor and Saul Singer that said Israel was the foremost creator of new companies per capita in the world.”

The poverty rate in households with at least one breadwinner is 13.7%, up from 9.6% a decade ago, Bloomberg notes. Some 5% of households with two breadwinners are below the poverty line.

Bloomberg says that while Israel’s economy has expanded at an average above 4% over five years, versus the average of 0.7% for the OECD, growth has been uneven. The article also takes aim at other points of Israeli economic pride.

“In a country proud of its scholarship — Israeli trade groups say it publishes more scientific papers per capita than any other state — educational shortcomings are cited as one of the key reasons for chronic poverty,” Bloomberg says. It also points out the low workforce participation among ultra-Orthodox men and Arab women.

“While the Israeli government points to 6.3 percent unemployment as a sign of a solid economy, that figure doesn’t take into account working-age people in poor groups who aren’t seeking jobs,” Bloomberg says.

The agency also cites the high cost of living, particularly skyrocketing housing prices, as a factor making Israelis’ lives difficult.

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