Growth amid poverty

Latest family spending figures are further proof of Israel's widening social gap.

If further proof of the trends in Israeli society in the past few years were needed, the Central Bureau of Statistics family spending survey has provided it. The survey gives new data on Israel's social gap.

The fact is that 60% of Israel's population spends less than the national average each month. The significance of this is that sections of the poplulation once described as middle class, and that succeeded in progressing economically, have now been left behind.

It can be presumed that in the seventh and eight deciles, spending is not much higher than the average, indicating that these is a widening gap between people's standards of living.

Moreover, the signs of a completely different lifestyle for the rich from that of the poor are becoming stronger all the time. While wealthier citizens have been spending more and more on transport and communications, as new communications possibilities become available, such as multi-channel television and broadband Internet, the less well-off still have to spend a large proportion of their incomes, more than 20%, on basic items like food. By contrast, in the two top deciles, more than a quarter of total spending goes on transport and communications.

In these conditions, its hard to talk about an average that will reflect reality and not just a statistical datum. However, the family spending survey serves as the basis for calculating the Consumer Price Index, so that the rise in average spending on communications and the fall in spending on housing and food will have an effect on the measurement of monthly inflation.

All in all, the index will become less volatile with the reduction of the weighting assigned to housing, although the difference will not be great.

Published by Globes [online], Israel business news - www.globes.co.il - on February 8, 2005

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