The National Insurance Institute in Israel has just released its report on the Israeli economy, and it is a shocker. As much else in Israel, measures of standards of living, poverty, work force and GNP all combine to make a whole of contradictions as complex as the makeup of the population itself.
According to the 2014 United Nations Human Development Index, Israel ranks 16th among 187 of the world’s nations in the category of “Very Highly Developed.” Yet, Israel is one of the poorest countries in the world with 1.6 million living in poverty. It’s not because of the economy but because many of the Israeli Arabs and Haredi Jewish families who do not work–more for cultural, religious and educational reasons than because of a lack opportunity.
According to the Israeli Central Bureau of Statistics, 31% of Israelis are living close to the poverty line, twice that of the 34 members of the OECD countries (Organization for Economic Co-operation and Development). And in 2011, 40% of children in Israel were at risk of poverty compared to 20% in the OECD.
However, the numbers are improving according to the 2013 annual report made by the National Insurance Institute. Standards of living rose in Israel in 2013 and the level of poverty declined.
JLNJ asked Professor Avi Simhon, a former chief economic advisor to Yuval Steinitz, the Finance Minister of Israel from 2010-2012, to explain the apparent contradictions of the statistics we list below. Simhon is senior lecturer in the Department of Agricultural Economics and Management, a member of Hebrew University’s Robert H. Smith Faculty of Agriculture and a member of the governmental committee for Economic and Social Change formed after social protests in Israel in 2011.
He said what this means is that the poverty rate of Israel is almost double the poverty rate of the OECD countries and the highest in the developed world. “Most of the poor people in Israel are either Arabs or Haredi Jews. The reason that the haredim are so poor is that they have very many children (on average 7.5 children).”
In order to be considered impoverished, a single person must earn less than NIS 2,989 ($766.21 a month), a couple less than NIS 4,783 ($1,226.10 a month) and a family of five less than NIS, 9,000 ($2,307.10 a month).
According to a translated version of the report “The poverty and social differences of social security for 2013, indicates a reduction in poverty (for) families, persons and children.” It states the number of families living in poverty went from 19.4 % of the population in 2012 to 18.6% of the population (432,600) in 2013. The incidence of poverty of people declined from 23.5% in 2012 to 21.8% (1,658,200) in 2013 and the percentage of children living in poor families dropped from 33.7% in 2012 to 30.8% (756,900) in 2013. The report said the standard of living in terms of median disposable income per capita rose by 4.4%., and the reduction in poverty is because of improved earnings among low wage workers.
At the same time, poverty levels for families with two breadwinners and those whose head of the family was unemployed rose. But those already living in poverty took a hit to their income. As families increased their income, benefits were cut for children in August in 2013.
The report also states that there was also a change in the method of measuring income from work. Simhon told JLNJ that with that many people to support, even two people earning a median salary would be poor. He said another reason why Arabs and haredim are poor is that they stop secular studies at the age of 14 and every male after the eighth grade continues on with only religious subjects.
“He doesn’t study any English, math, physics and biology whatever. Naturally such a person will grow to be a poor person because he doesn’t have any qualifications that will help him in the labor market.” Simhon said 25% of Jewish youth are haredim.
Changing the curriculum for schools receiving state funds had been in the works according to a government 2013 decision for Haredi elementary schools to teach at least 11 hours of English, Hebrew and math in their basic curriculum. As a penalty for non-compliance they would have gotten their state funding cut up to 75%.
However with the support of the Yesh Atid party (literally translated as ‘the future) the Economic Arrangements Law for 2015 was passed, delaying the requirements until the 2017/2018 academic year. “They’re incompetent,” said Simhon. “They did pass some legislation regarding the enlistment of haredim in the future, but not regarding schooling.” This put the cart before the horse, adding complications to training haredi youth who won’t have the basic education of their less religiously strict counterparts.
Simhon said this has nothing to do with GDP or the amount of money which Israel spends on education or defense (amounting to about seven to eight percent of the GDP). “In a way we have a segment of the population that chooses to be poor. When a family chooses to have eight children they choose to be poor. When a family chooses not to allow their children to learn secular studies after the age of 14, they choose for their children to become poor.”
Though haredi men do work, the numbers are much less than secular Jews or Arab-Israeli men. Most of their jobs are in educating their own children. Religious education is paid for by the Education Ministry. “Because they have so many children, for every two families you need a teacher, paid for by the government. This is their main occupation.”
In contrast to the males, females in the haredi community are encouraged to study for low and mid-level tech employment which would not require them to go to college. Simhon said they would take jobs as low-skilled computer programmers. “Many of the haredi women do go out to work, but because they have so many children they cannot really develop a career as a secular woman might–who would go on to university and become a higher paid professional.”
Simhon said those people who are normative Orthodox (not haredi) are not suffering poverty to the same extent. One of the reasons being they don’t have as many children, but they still have more children than secular Jews.
The choice to have more children despite economic restraints is not restricted to the haredim, but is also a practice among the Arab-Israelis said Simhon. He said this is just math, the more people in a household living off a certain amount of money the less money there is for the support of each individual. He said poverty is more extensive in the Bedouin communities, as they have more children.
He said another factor of poverty among this group is that the proportion of Muslim women age 25 to 65 who get employment outside of the home is about 25%. Also, on average, the Arab-Israeli population is relatively poorer than the haredim.
As to the general economy, Simhon said what problems there are is not because of less people working. “On average the participation rate in the labor force in Israel is higher than the OECD countries.” He said the problems arise because of their minimal secular education, their smaller contributions to the economy and because their salaries are low. “That’s the macro-economic problem,” he said.
Simhon said there have not been strong enough efforts to change this situation. “Haredi political parties have the balance of power and because of that politicians are very reluctant to confront them on the issue of curriculum in high school…It’s not government action. It’s a lack of government action at the root.”
By Anne Phyllis Pinzow
