The OECD today published its dismal and pointed report on Israeli society and the results of the social policies of its governments in recent decades.
The OECD's social and employment report on Israel depicts widespread poverty among Arabs and haredim (ultra-orthodox), discrimination against employees, the trampling of rights by employers, the feebleness of various governments in enforcing labor laws, exploitation of foreign workers, employees' growing dependence on labor courts which offer no relief, lack of political will to stop the revolving door for importing foreign workers, high poverty rates, discrimination against minorities, underspending on social services, and the gradual disappearance of the social safety net, especially for the unemployed.
The OECD also published its macroeconomic report, which reiterates several criticisms made in recent years: the Israeli economy demonstrated soundness during the economic crisis, and is in general a success story. At the same time, fiscal policies are not sufficiently transparent, cuts in social services have reached their limit, and it will actually be necessary to increase social spending in the future. It is necessary to reconsider the wisdom of cutting company and income taxes, while it is necessary to continue reducing the debt-to-GDP ratio.
The macroeconomic report also criticizes the Bank of Israel's policy of intervening in the foreign currency market, because of the possible harm to the credibility of monetary policy.
The OECD social and employment report includes some well-known figures about poverty and unemployment in Israel, and the focus on these issues depicts a dismal picture of Israel's social condition. One in every five Israelis lives in poverty, the highest level among OECD member states. Half of Israeli Arabs and 60% of haredim live in poverty, as defined by the OECD; in other words, they earn less than half of the median income in Israel.
As for employment, 40% of Israelis aged 15-64 do not work, either voluntarily or involuntarily, compared with the OECD average of 33%. Employing workers at low wages occurs against a backdrop of exploitation, job insecurity, and a lack of rights.
As for social expenditure, Israel spends 16% of GDP on social services, compared with the OECD average of 21%.
The situation could be improved by changing current policies, including credit points for low-income wage earners, and increasing child benefits for working families, in order to fight poverty in Israel. Poverty also affects foreign workers, whose numbers are steadily increasing. According to the OECD, the fact that companies that import foreign workers collect payment, whether legal or not, for each worker is an incentive to import more workers, while the government has no political will to stop the further import of foreign workers to Israel. These workers face exploitation and deprivation of their rights.
Published by Globes [online], Israel business news - www.globes-online.com - on January 20, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010