Two-thirds of poor live in households with at least one breadwinner (illustration)
Photo: Yaron Brener

Report: 60% of poor Israelis work

Poverty rate among working population has reached 18% in past two years, Bank of Israel report reveals

About two-thirds of Israel's poor live in households with at least one breadwinner, Bank of Israel economists said in an annual report submitted to the prime minister recently.


According to the report, the poverty rate among all people living in households with at least one breadwinner reached 18% in the past two years – a particularly high rate both compared to the past and compared to other developed countries.


It's true that in other developed countries some 60% of the poor lived in the middle of the previous decade in households with at least one provider, but because the general poverty rates in those countries were much lower, the average poverty incidence among workers stood at only 7.7%.


According to the data, the problem is particularly noticeable in recent years among Israel's Arabs. According to the report, about two-thirds of the poor workers are Arab – a very high rate compared to their percentage in the general population (about one-fifth).


Moreover, according to the Bank of Israel, about half of poor Israeli Arabs live in a home with one full-time breadwinner.


The poverty figures among the workers' public, especially in light of the Israeli economy's impressive growth date, are concerning. They mostly raise the question why is it so difficult to provide for a family in Israel with dignity.


The Bank of Israel economists are contemplating the meaning of these figures as well: "The rise in the number of poor workers, in light of policy moves which encouraged weak populations to join the workforce, raises the question whether the situation of the workers has in fact become worse," the report notes.


"In other words, have they become poorer – or is it about a change in the make-up of employment, so that people who were poor and relied on allowances were forced – after the allowances were cut – to go out to work, thus increasing the poverty incidence among workers, even if their personal situation had not worsened?"


Weak enforcement of labor laws

The central bank's economists are forced to admit that with the absence of suitable surveys, they are unable to answer this question.


They note that the recent years have seen a significant rise in the rate of employed Arabs, and that this phenomenon may have led to the inclusion of more poor people in the working population, but add that there are phenomena which may have worked to create a reverse trend, such as a rise in the number of university graduates among the working population and other demographic groups with a relatively low poverty rate.


The causes of poverty among workers are diverse, the Bank of Israel notes, but two main factors stand out – a high number of household members and low earning power. These factors are shared by haredi and Arab households and households of non-haredi Jews.


A low earning power stems from poor education or an education that does not match the labor market's demands, working in occupations characterized by a low salary or in industries in which the average salary is relatively low. Poor workers receive about half, and even less, of the salary other workers with similar characteristics receive.


Moreover, poor workers' low salary often stems from the weak enforcement of labor laws in Israel, with a high percentage of employees earning less than the minimum wage.


The central bank's economists note that the poor workers' status in the labor market is shaky and vulnerable, and that as a result they find it difficult to maintain their rights. The report stresses the importance of enforcing labor laws as part of the war on poverty.



פרסום ראשון: 04.22.11, 13:14
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