Israel's working poor become poorer

poverty  photo: Avshalom Sassoni
poverty photo: Avshalom Sassoni

The 2014 Poverty Report finds that the extent of poverty among working families grew.

The poor in Israel became poorer in 2014 and the extent of poverty in working families grew, according to the Dimensions of Poverty and Social Gaps Report released by the National Insurance Institute (NII) today.

The measures of the depth and severity of poverty rose sharply in 2014. The depth of poverty index rose by 6%, from 32.8% to 34.6%, and the index of the severity of poverty, which gives greater weight to the poorest section of the population, rose by some 10% of the general population. NII CEO Prof. Shlomo Mor-Yosef presented the 2014 poverty report today to Minister of Welfare and Social Services Haim Katz.

The report shows that, in 2014, 444,900 Israeli families, or 1,709,300 people, among them 776,500 children, lived in poverty. The general standard of living in Israel, measured as the median disposable income per capita, rose by 2.4% in real terms in 2014, and the poverty line, which derives from this figure, rose correspondingly. The incidence of poverty among working families rose from 12.5% to 13.1%. The Gini index of inequality in disposable income rose by 2%.

The general incidence of poverty among individuals did not change substantially from 2013 to 2014, rising slightly from 18.6% to 18.8%. A similar rise was recorded for poverty among families, from 21.8% to 22.0%, and among children, from 30.8% to 31.0%.

The incidence of poverty in haredi families was 54.3% in 2014. About two-thirds of the children in this sector lived in poverty in 2014. The incidence of poverty in Arab families rose from 51.7% in 2013 to 52.6% in 2014.

NII notes that the 2014 figures include the effect of the cut in child allowances implemented in August 2013. That being the case, the stability in the incidence of poverty among families is fairly good news, since child allowances paid in 2014 were lower. Among single-parent families, the incidence of poverty fell from 27.5% in 2013 to 25.1% in 2015, despite the child allowance cut, mainly thanks to substantial growth in employment, and because of a continuing decline in the number of children per family, particularly in the Arab population. In the Jewish population, the incidence of child poverty rose from 20% to 21.6%.

The incidence of poverty in families of senior citizens rose from 22.1% in 2013 to 23.1% in 2014. Among individuals the rise was more moderate.

Minister of Welfare and Social Services Haim Katz said in response to the report, "In the current state budget we have raised old-age pensions for senior citizens who receive income supplement and we have created a tool for reducing inter-generational poverty in the form of a savings grant for every child, measures that will reduce the dimensions of poverty. We shall wipe out the distorted phenomenon whereby people in the workforce are poor and cannot make ends meet.

"The state is committed to supporting weak sections of the population and to providing security to those who for justifiable reasons are unable to work," Katz continued, adding, "The state's greatest responsibility is to give the working person the ability to earn a decent wage. We will take steps to make it financially easier for those who receive welfare allowances to join the workforce, to give them a chance to escape the poverty trap. Poverty is not a decree of fate, and with correct planning we can reduce the proportions of poverty in Israel."

Prof. Shlomo Mor-Yosef proposed that the government should set long-term macro-social targets for reducing poverty and income inequality.

Published by Globes [online], Israel business news - - on December 9, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

poverty  photo: Avshalom Sassoni
poverty photo: Avshalom Sassoni
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