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13 Teves 5760 - December 22, 1999 | Mordecai Plaut, director Published Weekly








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Israel Poverty Population Passes One Million

by Yated Ne'eman Staff

The poverty rate in Israel took a slight turn for the worse in 1998, but the figures do not show any significant deterioration and some groups showed an improvement, according to a report published on Monday by the National Insurance Institute (NII) and presented by Minister of Labor Eli Yishai at a press conference in his office.

It found that the number of poor grew to 18 percent of the population, or 276,000 families with about 1.021 million people, up from 17.8% in 1997. A large proportion of these were children, and the number of children living under the poverty line was said to be about 440,000.

The rates took into account transfer payments and other aid. The figures were based on a "poverty line" set at 50% of the median disposable income, which for a family of four was NIS 3,831 (in current shekels -- about $912).

After taking into account transfer payments, the poverty rate rose in the five years to 1994, then fell slightly in the two subsequent years. "The year 1998 was marked by relative stability in the incidence of poverty in Israel," the NII report said.

In fact, the poverty rate fell for two key categories last year. For families headed by an elderly person, the rate fell sharply to 18.7% from 21.5% in 1997 and in absolute terms dropped to 63,000 families from 70,000. The rate for single- parent families dropped to 24.7% from 27.6%.

For large families, defined as those with four children or more, the rate remained essentially the same, dropping slightly to 35% from 36% of all such families.

The NII said the 1998 figures for the first time counted east Jerusalem, the self-employed, and people living in non-urban areas. But analysts said the wider survey did not affect the overall results by much and in making its 1997/98 comparisons, the NII adjusted for the differences in the population surveyed.

On a city-by-city basis, Bnei Brak topped the poverty list, with 35.2% of its inhabitants listed as living under the poverty line versus 26.5% in 1997. Of the families in Bnei Brak, 28.5% were considered poor last year compared to 21.9% the year before.

Herzliya, among the cities, had the least poverty, with only 3.3% of its inhabitants under the line, up from 3.2% in 1997.

Jerusalem ranked No. 2 in poverty with an incidence of 33.4%, versus 29.1 % in 1997. This was 27.1% of the families, compared to 23.9% the year before. Without east Jerusalem, the figure dropped to 19.7% from 18.1% in 1997, although that still made the capital the second most impoverished city.

The third poorest city was Beer Sheva. Poverty also rose there from 15.6% of the population in '97 to 18.7% of the people last year. This was 22.1% of the families.

Next in order were Ashdod -- 17.8% (18.6% in '97) of the population and 18% (20%) of the families; Ashkelon -- 17.3% (11.4% in '97) of the population and 16.2% (12.3%) of the families; Netanya -- 16% (21.3% in '97) of the population and 15.8% (20.9%) of the families; Haifa -- 12.8% of the population; Bat Yam -- 13.2% of the population; Rechovot -- 11% of the population; Tel Aviv -- 12.9% of the population. The cities were ranked by the number of families living in poverty.

Although the NII report did not detect any significant changes in the poverty level, it came after a slew of other reports documenting, to varying degrees of accuracy, growing unemployment, poverty, and income inequality.

The NII report also arrived as the government is in the final stretch of guiding its 2000 budget through the Knesset, amid lobbying by coalition partners to increase spending. The government is limited by its commitment to keep the budget deficit to 2.5% of gross domestic product next year.

The NII findings stirred a slew of recriminations and counter- recriminations between government and opposition, a tirade complicated by the fact the figures relate to a year when the Netanyahu government was in power, though in coalition with many parties that are now sitting in Ehud Barak's cabinet.

"[The poverty figures] are exactly the reason that we were chosen by the public, to fundamentally change the situation. I am determined that the government we head will change it," Barak said.

"A healthy society cannot allow itself numbers like that," Labor and Social Affairs Minister Eli Yishai told a press conference, warning that support by the poor in a referendum on a prospective Golan Heights withdrawal could be jeopardized.

Industry and Trade Minister Ran Cohen (Meretz) attacked his coalition partners Shas, the National Religious Party, and Yisrael Ba'aliya for their role in failing to cope with the situation when they sat in the Netanyahu government. He called for more government spending next year to create 80,000-90,000 jobs.

Cohen was joined by the Likud, which called on the government to withdraw the state budget in favor of a spending package that would better grapple with the poverty issue.

Although the rate of poverty did not show much change, experts said Israel fared poorly in comparison with other developed economies and that its income support programs are weaker than those in Europe.

"There's a very high level of poverty in Israel, particularly child poverty," said John Gal, a lecturer at the Hebrew University School of Social Work.

The NII figures generally showed that transfer payments from the government to poor families cut the poverty rate: for example, the incidence of poverty for families fell by more than half from 34.1% to 16.4% after taking into account transfer payments.

But Gal said that in Europe income support programs generally cut the poverty rate by 70%-80%. "[Israeli] government policy doesn't provide the means to bring families above the poverty line," he said.

Experts linked the high level of poverty both to high unemployment -- the jobless rate is now over 9% -- and low wages, which push those at the bottom of the salary scale below the poverty line.

One university economist said the poverty rate is exacerbated by the high correlation between large families and families with a single income earner, which is more typically the case in the Arab and chareidi communities. He said two-income families tend to have fewer children.

Gal warned that although economic activity has been picking up in recent months after a three-year slowdown, the effects are unlikely to trickle down into the poorest.

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