Poverty and inequality in Israel is high and worrying, the National Insurance Institute says

The NII also stressed that the cost of living was 4.2% higher in 2023 than in 2022 and that this followed a 4.4% increase in the year before.

By EVE YOUNG DECEMBER 18, 2024 15:57 Updated: DECEMBER 18, 2024 16:14

People beg on the streets of Jerusalem. (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

Following the economic impacts of October 7, 2023, and the coronavirus pandemic, 2023 continued to be a "socioeconomically worrying" year, Israel's National Insurance Institute (NII) Vice Chief Executive Officer, Research and Planning Nitsa Kasir said in a report on poverty published by the NII Wednesday.

"The extent of poverty in Israel is among the highest in developed countries. The rate of economic poverty, meaning poverty influenced by economic growth, is very high in international comparison," according to the report.

The NII also stressed that inequality in Israel is high in comparison to other developed countries.

Some 1.98 million people were under the poverty line in Israel in 2023, including over 870,000 children and over 150,000 senior citizens.

This means that Israel had 20.7% poverty in the general population and 27.9% and 12.8% among children and seniors, respectively.

People beg on the streets of Jerusalem. (credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)

The NII also highlighted the climbing cost of living in Israel, highlighting that in 2023, the cost of living was 4.2% higher than in the previous year and that this followed a 4.4% increase in the year before.

"The cost of living impacts all of Israeli society. However, the burden on the population is not evenly distributed, as the relative economic strain is deeper and more severe for populations already facing financial hardship," Kasir said in the report.

High levels of poverty among haredi, Arab-Israeli populations 

When looking at poverty across different populations, the institute highlighted that poverty levels are very high among the haredi and Arab-Israeli populations.

Poverty among Arab Israeli families stood at 38.4% in 2023, slightly down from 38.9% in 2022. Poverty among ultra-Orthodox families also dropped slightly from 33.9% in 2022 to 33%.

The part of the poor population that was Arab or haredi stood at 64.9%, more than double their population share, the NII said.

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Poverty levels were also higher among those from the North, South, and Jerusalem.

The institute stressed that while the coronavirus pandemic and the Israel-Hamas War hurt growth and exacerbated inequality, government assistance and social budgets meant that poverty, as measured only by income levels, did not increase in almost all populations.

General levels of poverty remained almost unchanged, going from 20.8% to 20.7%, and among families, from 20.3% to 20.1%.

Without government intervention, poverty would have been more widespread and would have increased slightly, the NII said.

"These developments highlight the critical importance of the social safety net during times of crisis in assisting low-income individuals whose earnings have decreased," the report said.

"Since October 7 and the outbreak of the war, the significance of the welfare system and the social safety net has extended not only to addressing income reductions but also to financing the increased expenses incurred by certain populations as a result of these events."

The aid provided for those harmed was significant but did not help all of those in need equally, the NII said, highlighting freelancers as a population for whom aid was not enough.

"The significant expenses of the war will necessitate budget cuts and finding sources of funding. Care must be taken to ensure that these cuts do not harm the weaker segments of society, whose socio-economic situation is already problematic."