Fight Israeli poverty, not poverty statistics

Poverty in Israel is not the result of low social security transfers, it’s the result of low income. And the truth of the matter is that the issue of poverty is not high on the Israeli government’s list of priorities.

By Dr. Shlomo Swirski and Attorney Noga Dagan-Buzaglo (translated from Hebrew by Noam Benishei)

The Alaluf Committee to Fight Poverty was appointed by a government that does everything in its power to reduce labor costs in Israel for the benefit of corporate business, as well as the government itself, because it, too, is a big employer. In doing so the government that appointed the committee is complicit in the generation of poverty: it privatizes public services, it fails to enforce existing labor laws, it delays renewal of collective agreements for as long as it can and goes out of its way to oppose the raising of the minimum wage.

When the labor market offers a large section of its workers a salary that places their families below the poverty line, what is required is a change in the labor market and the wage system. Raising social security benefits, though a welcome step in itself, provides no real answer: If a 7,000 NIS ($1,950 income places a family of four below the poverty line, that indicates that the problem lies not in the size of this or that social security benefit but rather in the fact that most employees in Israel earn less than 7,000 NIS.

Eli Alaluf, head of the Alaluf Committee. (photo: Israel Prize website)
Eli Alaluf, head of the Alaluf Committee to Fight Poverty. (photo: Israel Prize website)

What is really needed, then, is a committee to examine the assumption that labor costs must always be reduced if economic growth is to be achieved; a committee to examine the fact that once growth is achieved, its fruits trickle up, rather than down, as so often promised. A committee to examine why so many Israelis are denied the tools that may help them cope in the labor market. A committee to examine the working assumptions of so many leaders, for instance Manuel Trajtenberg, chair of the Planning and Budgeting Committee of the Council for Higher Education in Israel, who, when asked what about the roughly 50 percent of youth who never make it to college, replied in all elitist sincerity: “An academic degree should not become the be all and end all” [Hebrew]. What is needed is a committee to examine why Minister of Finance Yair Lapid deems it right to commit to no tax raises in 2015, when it is clear that with no budget increase, no expansion of higher education is possible, nor can services provided by poor municipalities be upgraded, nor can the Alaluf Committee’s recommendations be implemented.

The Alaluf Committee hasn’t discovered anything new

We at the Adva Center, alongside other researchers and social change organizations, have said time and again for: The Israeli welfare state is shrinking and the benefits rate is very low when compared to that of the other OECD countries. We have been talking for years about the need to increase rental assistance and rehabilitate public housing rather than eliminate it; about the need to talk about a living wage and not just a minimum wage; about the need to expand budgets for vocational training programs, rather than contract them; about the need to expand preschool education; about the need to reinstate balancing budgets for low-income local authorities.

Another part of the committee’s recommendations harks back to widely criticized programs favored by the Ministry of Finance and the Bank of Israel: the reintroduction of the so-called Wisconsin Plan, despite its being one more way of humiliating the poor; extending the negative income tax, even though the real problem is the low wage rates in the Israeli economy; reducing the number of benefits receivers by introducing more exacting employment tests to assess income support eligibility, despite the labor market’s failure to generate enough jobs that provide a living wage; reducing the number of foreign workers as a wonder recipe for increasing employment rates, even though those employing them refuse to offer Israelis proper wages and conditions.

The truth of the matter is that the issue of poverty is not high on the Israeli government’s list of priorities. The Alaluf Committee wouldn’t have been appointed had Israel not joined the OECD, which releases embarrassing yearly statistics about poverty rates in the country. The government wanted a committee to fight poverty statistics, not poverty itself. The recommendations of the Alaluf Committee may help alleviate government distress, but it is yet to be seen whether it will help alleviate the distress of the poor.

Dr. Shlomo Swirski is the academic director of the Adva Center. Attorney Noga Dagan-Buzaglo is a researcher at the Adva Centre, specializing in education and labor market policies. This article was first published in Hebrew on Haokets.

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