Israel: staring into the abyss

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The social conditions and political values described in this article about poverty, inequality and social exclusion in Israel from the Jewish Telegraphic Agency, JTA, will sound depressingly familiar to American readers.

However, it is one thing to have these conditions in a country of 300m people, rich in natural resources and "surrounded" by Canada and Mexico and quite another thing to have them in Israel: without natural resources, hated and feared by all its neighbors and dependent for its economic survival on a tiny, portable, easily fugitive, group of scientists, engineers and financiers and on the volatile, venture capital at the heart of the new economy.

This instability brought on by social failure is at the heart of all of Israel's policies and is a major factor in evaluating the tensions of the Middle East. Such a failed society in a tiny country would have trouble surviving even in a quiet part of the world, in an area where its physical survival has always been in dispute, Israel is truly staring into the abyss. This angst is transmitted directly to its most committed American supporters as a toothache in a tiny tooth absorbs the total attention of entire body and ... as the narrators in old newsreels used to solemnly intone, "the rest is history"... History which we shall all have the privilege of living through. DS

Poverty in Israel: The great divide - JTA

Abstract: Once idealized as a socialist paradise, the Jewish state is increasingly becoming a country of two classes — those who have soared in the increasingly capitalist economy and those who have stumbled in its wake. Despite its much mythologized egalitarian image, Israel has always experienced economic gaps. But now the divide between haves and have-nots has grown to alarming proportions. If economic policies and other factors have spawned a privileged class, they also have produced a deeply entrenched underclass populated by the elderly, Holocaust survivors, Arabs, immigrants, fervently Orthodox Jews, single parents — even two-income families.(...) Poverty rates in Israel reached a new peak in 2005, although they leveled off in 2006, according to statistics by the National Insurance Institute. According to institute findings, one of every four Israelis lives below the poverty line — that’s 1.6 million people. Thirty-five percent of children are living in poverty, leaving Israel with this unhappy distinction: It ranks among Western countries with the greatest percentage of poor children, according to the insurance institute. “Children who grow up in poverty are more than likely to live in poverty as adults,” said John Gal, an economist at the Hebrew University. “They won’t have the capacity, human capital and capabilities to be able to get out of poverty, to be mobile in society.”(...) As evidence that at least one sector is thriving, consider that the number of Israeli millionaires per capita is twice the world average, according to the 2005 World Wealth Report. Some 7,400 Israelis are worth at least $1 million, the report said, including 84 who have at least $30 million. The total liquid assets of Israel’s upper echelon grew by 25 percent, to $30 billion, between 2004 and 2005, according to the report. Those designated by the report as the nine richest Israelis made their fortunes in everything from diamonds to real estate to communications to entertainment.(...) Although the general standard of living in Israel has risen in recent years, the lower socioeconomic classes have seen their situation plummet, largely due to massive cuts in government social spending that began in 2002. The budget cuts reflect an ideological and policy trend that is reordering the country’s class structure, according to Uri Ram, a sociologist at Ben-Gurion University of the Negev, and the author of the upcoming book “The Globalization of Israel: McWorld in Tel Aviv, Jihad in Jerusalem.” Even the Labor Party, which typically is associated with generous social welfare spending, has gone back on its founding values, said Ram, to become a part “of this process of transforming Israel from a welfare society into this kind of free-market, corporate-dominated society.”(...) Some say the current economic disequilibrium in Israel can be traced to the neo-conservative fiscal policies of the Likud Party acting at the behest of then-Finance Minister Benjamin Netanyahu, who believed that Israel’s economy had become too bloated and bureaucratic to compete in the global market. Netanyahu’s remedy: Cut spending, reduce dependence on government services and reduce inflation. While Netanyahu is no longer the finance minister, the same approach remains in place today. The resultant budget cuts that began in 2002 included the elimination of food subsidies, a decrease in child allowances, increasingly stringent eligibility standards for welfare, the elimination of many social programs for the elderly and a reduction in welfare benefits. The cuts effectively shredded the social safety net, leaving many families unprepared for the misery that would follow, social policy activists say. But since the early 1990s, with the mass arrival of immigrants from the former Soviet Union and the growth of the high-tech sector, Israel has seen itself become an increasingly capitalist society, a society where the economically strong survive and those in the middle and lower rungs have had some trouble adjusting.(...)In contemporary Israel, minimum-wage salaries — about $12,800 per year for a couple with two children — are insufficient to pull a family out of poverty. As a result, even many dual-income earners find themselves setting stark spending priorities for themselves and their families. They sometimes have to choose between buying food or medicine or paying the rent.(...) Among the impoverished elderly are many Holocaust survivors. In fact, Noah Flug, who heads an umbrella group of Holocaust survivor organizations in Israel estimated that about one-quarter of Israel’s 250,000 survivors are living in poverty. “There is lots of focus in Israel on those killed in the Holocaust, but those who lived through it are forgotten,” said Flug.(...) Ironically, though, the war highlighted the chasm in Israeli society between haves and have-nots. Those who could afford to leave the North did so. The poor, however, were left behind to fend for themselves in bomb shelters. READ IT ALL