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Israel's Economy, Social Protests & the Federation Response

High prices, low wages

Israel draws tourists from all over the world. At some point in their visit to Israel, it is likely they will find themselves trying a falafel or shwarma: exotic cuisine to visitors, but dietary staples to Israelis. The average shwarma costs about 35-40 NIS in Israel's major cities; the equivalent of a staggering 2 hours work at minimum wage ($5.85/hour). 

The slides above (from The Marker) illustrate the reality faced by a large number of Israelis who, striving to achieve a middle-class lifestyle, struggle to cope with rising costs of staple items. For example, a tube of Colgate toothpaste is about 20NIS in Israel, 82% more expensive than the New York price of 10.95NIS. 20 NIS, $5.33, is almost one hour of minimum wage work.  Importers attribute the price disparity to several factors, including VAT, Hebrew packaging, and the kosherization process.

While unemployment is relatively low (5.5%), the amount of "working poor" is staggering:  middle class families' salaries cannot keep up with the rising cost of living. According to the Taub Center, the number of poor households headed by a wage earner has risen from 49% (1995) to about 58% (2009).  The "working poor" amount to only 40% of those considered poor, even with 60% of those individuals working full time.

In Israel, the average gross income for a man is $2,160 per month, and $1,703 for a woman. Those in key professions of teaching and nursing earn $1,600 a month on average, according to Israel’s Central Bureau of Statistics.  Remember that most Israelis earn about one-third of their American counterparts' salaries but if they buy a car, they'll need to spend more than half a year's salary on it. Startling figures.  

Time to protest

During the summer of 2011, hundreds of thousands of Israelis took to the streets to protest the rising cost of living.  Over three months, people demonstrated about issues ranging from housing costs, food prices, and wealth distribution to child care, maternity leave, and education costs. The majority of the protesters were in their 20's and 30's, middle class, educated men and women.  However, other segments of the population participated, such as religious, Arabs, elderly, and those of low socio-economic status. It is expected that summer 2012 will bring the protestors onto the streets again.

There has since been a shift from social protest to political action, with Knesset discussions following the protestors' demands. Now with the new unity government, the public is hoping for even more response to their campaigns.

Although several national supermarket chains reacted to the protests by offering a variety of deals and specials, reflecting a genuine price reduction, this was short lived. Sales of premium products have slowed but average prices of basic goods are up compared to 2010. 

A Haaretz-Dialogue poll (12/07/2011) stated that, for 38% of those surveyed, socio-economic issues topped the list of topics that would most influence their electoral vote. Other polls showed 25% of surveyed Israelis describing their current economic situation as "not good" and 23.6% claiming the greatest threat to the State of Israel as "social divides".

The social protests brought people together in a way unprecedented for the current generation of Israelis.  When 24% of Israelis respond "social protests" to, "What was the most significant event of the past year?" one can only assume that this event has resonated in a way which will have a long term impact. 

Vulnerable populations

The Haredi and Israeli-Arabs constitute a large portion of Israel's poor. According to the Bank of Israel Governor, Stanley Fischer, the poverty rate in the Ultra-Orthodox and Arab sectors has increased by over 50% in the past decade.  On the Haredi side, high natural growth and low employment rates among men have contributed to their economic status. In contrast, the Arab population's difficulties have arisen from low employment rates among women.  While Arab men are generally employed, these jobs do not profit from economic growth.  One solution proposed is the implementation of Israeli-Arabs into the high tech work force: in families in which two members are employed, the poverty rate is only 3%, while with only one family member working it is 25%.  

What's being done?

There are many organizations within Israel whose mission is to bring relief to the most vulnerable populations.  JFNA is proud to partner with the American Joint Distribution Committee and the Jewish Agency for Israel in our unwavering commitment to assist those in need. Programs which assist those in need range from soup kitchens, to job training, to after-school educational enrichment.

JFNA's partner, JDC, operates job training centers which provide a multitude of services. Over a dozen JDC employment centers nationally serve Israeli-Arabs whose high poverty levels have been proven linked to the high unemployment levels. Mafteach Centers serve the ultra-Orthodox community and report servicing 3,000 ultra-Orthodox annually.  JDC's Career Alternatives Program assist ultra-Orthodox women interested in careers in high-tech and other fields. Women are also provided with career training and employment assistance in coordination with seminary studies. These two programs fall under the umbrella of a larger initiative, TEVET (Fighting Poverty Through Employment). Over 35,000 Israelis have benefited from the highly efficient TEVET initiative, which is composed of a diverse array of projects targeting specific groups that are experiencing their own distinct employment challenges.  Populations which have benefited from TEVET initiatives include minorities, Arab-Israelis, ultra-Orthodox Jews, hard to employ youth, and mentally disabled.

YEDID also focusses on economic assistance and community empowerment, providing a vast range of services including legal assistance, family budget management courses, and public policy initiatives.  YEDID is supported by many federations including Boston, Greater Miami, Jewish Community Federation of San Francisco, Central California, Chicago, Detroit, Southern Arizona, Seattle, Orange County, UJA Federation of Northern New Jersey, UJA New York Federation, and the United Jewish Federation of Metrowest NJ. World ORT runs Kadima Mada, a program helping over 100,000 high school students from under-resourced areas gain better skills to equip them in the work place, cutting short the poverty cycle.  

Federation-supported programs and others supporting the general public



Power point Presentation from GA 2011 found on JFNA Israel & Overseas website,7340,L-4046296,00.html 


 Tikva Schein and Jessica Ariff