1.6m People Live Below the Poverty Line in 2007

Despite the improvement in all of Israel's economic indicators in 2007, a rise in the minimum wage, increased employment and higher real salaries; the country's poverty level remained almost unchanged in 2007.

Despite the improvement in all of Israel's economic indicators in 2007, a rise in the minimum wage, increased employment and higher real salaries; the country's poverty level remained almost unchanged in 2007.

According to the National Insurance Institute's semi-annual poverty report released yesterday, 1,674,800 people were living under the poverty line in 2007 - 24.7% of the Israeli population - an increase of about 20,000 people over 2006. In mid-2006 the percentage was 24.4% and rose to 24.5% at the end of 2006.

The number of children living in poverty reached 804,000; or 35.9% of all Israeli children. A year ago the figure was 35.2% and 35.8% six months ago.

The report highlights the fact that poverty is not only a problem of the unemployed and those dependent on NII allowances: it also hits those in work. The number of families with a single wage-earner below the poverty line in 2007 was 168,000, up from 162,000 in 2006. Even more shocking is the number of families with two wage-earners but who still live in poverty: 23,000. This figure rose from 21,000 such families in 2006.

In all, 40% of the families living under the poverty line are working.

The explanation for such a high percentage of working poor is that the Israeli work force is employed in a wide range of occupations, many of which pay extremely low wages, such as cleaning and guard services. In addition, many workers are employed part-time, or through manpower contractors and other forms of outsourcing. Also, many positions in the periphery are in agriculture; or simply pay unlivable wages.

The poverty line in 2007 was NIS 2,028 in monthly income for a single person, and NIS 3,244 for a couple. For a family of four, the poverty line last year was NIS 5,191.

According to the NII report, there were 420,000 poor families in Israel last year, up from 404,000 in the previous annual report.

The percentage of families below the poverty line rose slightly last year to 20.5%, up from 20.2% the previous year, as 2006 saw a small decrease. The report is based on the Central Bureau of Statistics' income survey.

Somewhat surprisingly, poverty levels grew among the elderly too. Last year NII old-age pensions were increased, and there was reason to believe that fewer elderly persons would remain poor; but that turned out not to be the case.

The half-a-percent rise in most allowances did not match the rise in consumer prices; and the poverty line is measured relative to the median income - so the good economic situation was not reflected in the poverty numbers.

The NII, however, said it expects the effects of increased old-age allowances to be felt in its next report.

"We are stuck at a very high level of poverty and I would have liked to see a drop, but all in all the situation is stable," said Dr. Daniel Gottlieb, the head of the NII's research department.

On Sunday, the cabinet will be presented with the recommendations of an expert committee on the use of additional methods to measure poverty; and not only according to income. Tools such as measuring spending will be recommended. Gottlieb said the next poverty report will include some additional measures, but what the final changes will be is still not clear.

Ofer Eini, chairman of the Histadrut labor federation, said in response to the report: "The government is creating virtual employment whose goal is to show off economic statistics portraying a drop in unemployment.

"We need to continue and advance the enforcement of labor laws on one hand, and to create a quality employment program on the other hand - one different than that instituted in recent years. One that will create jobs where someone can earn an honorable wage, and not empty jobs that just increase poverty."

Shas leader and Industry and Trade Minister Eli Yishai insisted that "Shas will not remain in a government which withholds its hand from the children of Israel. What else needs to happen and how many more poverty reports need to be issued so that those who need to understand realize that restoring child allowances is the solution to poverty?

"Even the NII experts have determined that the solution is restoring the allowances," he said.

MK Shelly Yachimovitch (Labor) said the most worrying figure in the report is the growing number of working poor. She said this was the result of people being employed via contractors offering starvation conditions, and that this makes the rise in employment rates completely irrelevant.

Ruth Sinai, Yair Ettinger and Zvi Zrahiya contributed to this report.