Israel's poverty remains worst in OECD

poverty

Poverty has eased among the elderly and Arabs, reports the National Insurance Institute, but more accurate data about Bedouin has raised the number of poor.

A recalculation of poverty among the Bedouin population in Israel increased the number of children classified as poor in Israel by 10.2%, according to figures published today by the National Insurance Institute in its report on poverty. The report shows a concrete improvement in poverty in Israel in most aspects: increases in the minimum wage and child allowances, plus other measures taken by the Minister of Finance and the government. At the same time, the report states that Israel still has the highest rate of poverty in the OECD, and that a family in Israel with three or more children will be below the poverty line if both parents are employed full-time at the minimum wage.

"I am glad about the downtrend in the number of poor people," said Minister of Labor, Welfare, and Social Services Haim Katz, "although we still have 1.8 million people that we have to get out of poverty. The two most prominent trends are a fall in the number of poor people who are senior citizens and in the Arab community." He added, "The ministry will do its best to increase income support allowances by NIS 705 million a year, link income supports to the average wage, and make sure that Israel will have no senior citizens below the poverty line. The state of Israel's allowances has brought it to last place in poverty in the OECD."

According to the report, Israel had 1,809,000 poor people in 463,000 families in 2016, including 842,300 children. The number of poor children grew by almost 80,000, but the National Insurance Institute is attributing this to new figures obtained for the Bedouin population, after the Central Bureau of Statistics succeeded for the first time in five years in sampling the Bedouin population in southern Israel. Excluding the Bedouin population, the number of poor children in Israel rose by only 1% to 773,000. The reports figures ostensibly show that Bedouin children were not counted at all in 2015 among poor children in Israel. According to the figures published today, the number of poor children in Israel in 2015 was 763,000 excluding the Bedouin population and 764,200 including the Bedouin population.

Most poverty parameters showed an improvement in 2016, compared with 2015, following the trend towards narrowing of income differentials in Israeli society in recent years. The National Insurance Institute attributes this to a 3.8% increase in the standard of living in real terms in 2016. Following the increase in the minimum and median wage, the poverty line also rose (it is calculated at 50% of the median wage) to a NIS 3,260 monthly income for an individual, NIS 5,216 for a couple, and NIS 9,779 for a family of five.

The general incidence of poverty in Israeli society fell from 19.1% in 2015 to 18.6% in 2016. Even after the decrease, however, Israel has the highest incidence of poverty in the OECD, ahead of Turkey, the US, and Mexico. The poverty depth index declined 4% in 2016, while the poverty severity index fell 3%. The Gini coefficient of inequality in disposable income and index for inequality in general income were both down 1.3%, The National Insurance Institute notes the Gini coefficient of inequality for gaps in general income has fallen by 10% since 2000.

The National Insurance Institute attributes the improvement in the dimensions of inequality and the incidence of poverty to measures taken by Minister of Finance Moshe Kahlon and the government with the aim of bolstering the disposable income of low-income families: a 6.8% increase in the minimum wage in 2016 and increases in child and senior citizens allowances. Another contribution came from the labor market, where unemployment continued to fall, despite warnings that increasing the minimum wage would increase unemployment, thereby harming poor people.

At the same time, the National Insurance Institute stated, "Despite noticeable improvements in the dimensions of poverty and inequality in 2016, Israel's relative situation by international comparison continues to be the worst in the ranking of OECD countries. Israel still has the highest poverty rate, because its relative placing also depends on developments in other countries. Indeed, the poverty report indicates that the mother of a single-parent family with one child will be in poverty even if she works full-time at the minimum wage and receives allowances from the National Insurance Institute. In addition, a couple with three or more children will not rise above the poverty line even if they both work full-time at the minimum wage."

Published by Globes [online], Israel Business News - www.globes-online.com - on December 6, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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