In a recent survey in Haaretz’s TheMarker business section, 42 percent of Israelis were worried about losing their main source of income, while 62 percent were concerned about their financial future, as well as that of their children. Forty-seven percent said they would find it hard or impossible to deal with an unexpected expense of 9,000 shekels ($2,600).
- Tax data: Half of all Israelis earn under NIS 5,812 a month
- Two-thirds of Israelis earn less than average wage
- Bank of Israel: Housing prices up 8% in last year
- Israel's middle class really is disappearing
Their fears are not unfounded; the median monthly wage is 6,500 shekels in a market where employees' position has sharply declined in recent decades amid lame pension plans. People’s financial survival is at risk. All this is happening against the backdrop of the state’s meager unemployment benefits, giving just cause for fear.
In the survey, 75 percent of respondents owned their apartments, whether fully or while holding a mortgage. Seventy-nine percent owned at least one car, and 44 percent went on vacation at least twice a year. How does this jibe with such a low median wage? How does it conform with the economic angst reflected in the survey?
The answer lies mainly in the excessive granting of credit, which finances lifestyles inconsistent with people’s incomes. According to the Bank of Israel, Israeli household debt grew to 409.7 billion shekels from 339.5 billion shekels between 2010 and 2013, a 20-percent rise. During this time the average wage rose only 10 percent, to 8,828 shekels from 8,015 shekels, according to the National Insurance Institute.
This situation is made worse by the housing shortage and its attendant mortgage problems. So the overall economic picture is warped: impressive rates of economic growth that conceal a recipe for economic insecurity.
This involves consumption exceeding disposable income while borrowing on credit — a practice that becomes a permanent lifestyle until Israelis have to drag themselves out of debt. Households use state benefits for training or education in order to buy new cars rather than to make extra mortgage payments or cover a bank overdraft. Ignorance about household budgeting abounds — what payments are made to whom, which might be redundant or excessive.
We’re all entitled to a vacation or a brand-name, extra-safe stroller for our baby. We’re also entitled to criticize our country and its economic system. But we must take responsibility for our finances and adjust consumption to income.
For example, we can live in a different neighborhood to avoid high rent or mortgage payments. We can eat at home and not in restaurants, or go camping in Israel’s Arava region rather than bleed money in European tourist traps. We can also tell our 10-year-olds they don’t have to own smartphones.
We cannot protest against the system while feeding it. We cannot complain about Israel’s Darwinian capitalism, eroding salaries and insecure jobs while indulging in unbridled consumption. Such behavior detracts from the legitimacy of the middle class’ struggle while hastening its slide into anxiety and poverty.
People who feel crushed under the boot of the economy must embrace the social protest, but they must show they have done everything to improve their lot. The struggle isn’t about rental prices on Tel Aviv’s Rothschild Boulevard or the right to own a smart TV set.
The struggle is about minimum job security, fair labor laws, a public health system accessible to the entire population, old-age security and an adequate social safety net for times of crisis. These are the elements of financial security that we can demand of the state and society — but only after running our households properly.