Taub Center: Israel has West's widest income gap

The Taub Center describes Israel as a country which has the widest income gaps in the West, high poverty rates, and people who forego dental care, heating, air conditioning, and even food.

The Taub Center for Social Policy Studies in Israel describes Israel as a country which has the widest income gaps in the West, high poverty rates, and people who forego dental care, heating or air conditioning, and even food.

According to the Taub Center report, published today, the income gap within Israel's middle class is the highest among Western countries - the income of Israel's 75th percentile is 2.8 times the income of the 25th percentile. "The effectiveness of the welfare and tax systems in alleviating poverty is the lowest among developed countries, even more than in the US," says the report.

The report challenges Prime Minister Benjamin Netanyahu, who has asserted that the Israeli economy is in good shape, if the Arabs and haredim (ultra-orthodox) are discounted. "The poverty rate of 29% among factor income is very high, even without the Arabs and haredim," says the Taub Center, which adds that poverty among children "is the highest among developed countries" one third of Israeli children live in poverty.

Although the Taub Center notes that Israel's unemployment rate is one of the lowest in the West, and that the rate of participation in the labor force rose from 58% in 2003 to 64% in 2012, productivity in every sector, except for agriculture, is among the lowest among developed countries.

The Taub Center found that, among haredim, a college degree greatly increases the chances of men finding work. The employment rate of haredi men with a college degree is 71%, compared with 34% for haredi men without a college degree. The chasm between the two groups is reflected in income: the average salary of haredi men with a college degree is NIS 13,565, compared with NIS 7,800 for haredi men without a college degree.

The Taub Center says that a substantial number of Israelis go without basic necessities due to financial distress. "34% of the Israeli population faces material distress due to their financial condition, and forego heating or cooling their homes. In addition, 20% of Israelis are cutting back on food, and 13% consume less electricity and communications because of financial distress. Among people needing medical attention, almost 50% forego dental care out of financial considerations, 16% forego other medical treatment, and 15% forego medicines.

"Material distress is limited to the lowest 25th percentile in Israel, but also affects the middle class - and at very high proportions. More than half of people in the 25-50th percentile forego heating or cooling their homes, 30% cut back on food; 16% consume less electricity and communications, and more than 50% forego dental care. Even among people who earn more than the median wage, 30% forego heating or cooling their homes, 14% cut back on food, and 35% forego dental care because of financial considerations."

Published by Globes [online], Israel business news - www.globes-online.com - on November 27, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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