Official: Bibi's wrong, most poor work
Former deputy governor of the Bank of Israel, says Benjamin Netanyahu's claim that the solution to poverty is to get people off social welfare into the work force is erroneous
Over the last years we have seen poverty rising among salaried families. More than half of Israel’s poor are in fulltime employment, former Bank of Israel Deputy Governor Prof. Zvi Zussman said Monday.
"The problem is that 67 percent of them earn a low wage," he added. “The job market is the key to saving many citizens from poverty by lowering the number of people on low wages - raising the minimum wage and gathering support for the move.”
During a conference on poverty organized by the Friedrich Ebert foundation, Zussman attacked the fiscal policies of former Finance Minister Benjamin Netanyahu, saying scientific surveys disproved Netanyahu’s argument that unemployment breeds poverty.
Netanyahu’s claims that fast economic growth is the most suitable social policy and that a large public sector and generous public spending are a burden on the economy are inaccurate, Zussman said.
Plans to reduce state unemployment allowances to encourage people to join the workforce have also been disproved.
'From 1980 to 2003 GPD grew by 40 percent'
Zussman proposes a reduction of unskilled foreign workers and an introduction of legislation to protect low-waged private sector workers and weaken professional unions. Another solution is to increase spending on education, raising child allowances and introducing negative tax schemes for low-waged workers.
The former deputy governor said that from 1980 to 2003 the GPD grew by 40 percent, yet income gaps in the workforce increased by 22 percent and poverty rose by 20 percent. Economy growth is no guarantee for reducing economic gaps, research conducted by the Bank of Israel show.
In countries like Sweden, Norway, Australia, Finland and Holland, it has been proven that large welfare budgets and high incomes can go hand in hand.
Zussman said the welfare system, public spending and tax rates in Israel are high in comparison to countries with a relatively similar economy, and do not hinder economic growth.
