One in five Israelis live in poverty

Two new reports released by the OECD reveal that serious inequalities are rife in Israeli society despite the resilience of its economy during the global recession.

The reports, released today, note that despite the fact that Israel had successfully weathered the global economic crisis there were severe weaknesses in the Israeli economy, particular with regard to its social welfare provisions. The reports also highlight the need for wide ranging reform of education in Israel.

According to the 'Reviews of Labour Market and Social Policies' report, one in five Israelis lives in poverty, a higher ratio than in any OECD country. Poverty is highest among the youngest and fastest growing population groups. Over half of Arab Israelis and 60 per cent of Haredim, ultra-orthodox Jews, live in poverty compared with just over 10 per cent of the rest of the population.

Unemployment is high in Israel with 40 per cent of people aged between 15 and 64 not working compared to the OECD average of 33 per cent. Israel's public spending on social policies is also below average. It currently stands at 16 per cent of GDP, five points less than the OECD average.

With regard to labour reforms, the report states: “Israel needs to stamp out illegal hiring and employment of temporary foreign workers and enforce minimum employment conditions for all workers in Israel. Israel’s government should also be more vigorous in promoting fair employment opportunities for minorities in both the public and private sectors.”

The Economic Survey report, meanwhile, details a number of improvements that  need to be made in Israel's education system. While it welcomes recent reforms in primary and secondary education, it urges the application of these reforms to the upper-secondary system. It also states that “more strenuous efforts are required to level the educational playing field for Arab-Israelis” and that  vocationally oriented learning should be encouraged within the Haredim community.

The Economic Survey also emphasises that while increased spending is needed in the area of social policy that the Israeli government should work to reduce public debt. While the OECD accepts this may be difficult it outlines a series of suggestions with regard to taxation and spending cuts which should make cutting public debt achievable without impacting on social spending.

OECD Secretary-General Angel Gurria stated that increased spending on social policies would be beneficial for Israel in the long run. “Real progress on social issues requires a more inclusive society and better chances for all citizens to share the fruits of economic growth,” he said. Gurria was in Israel to launch the report.

The report comes against the backdrop of ongoing discussions regarding Israel's accession to the OECD. Israel is one of five countries, along with Chile, Estonia, the Russian Federation and Slovenia, that were invited in May 2007 to open negotiations for membership. As yet, only Chile has successfully concluded the negotiations.