The Israelis struggling with poverty and the high cost of living

The Israelis struggling with poverty and the high cost of living

An Israeli man salvages the fruit discarded by traders at the Shuk HaCarmel food market in Tel Aviv on 22 June 2018.

(Johanna Geron)

The blue and white flags bearing the Star of David are flying all around, in the smallest of grocery shops, from every balcony and wing mirror. It is a special anniversary: 70 years. The age of a dearly-loved grandfather or a grandmother we begrudgingly visit. Seventy candles on the cake of the Jewish state that leaves some with a bitter taste of injustice, unkept promises and hope for a better future.

In 14 May 1948, Israel declared independence, resting on two major foundations: Zionism and a degree of socialism. Seven decades later, segments of the population living below the poverty line, are becoming disenchanted with the ever-widening economic inequalities.

“It was like being at day camp the whole time,” recalls Michal. “We played out, without a care in the world, free from danger. It was great!” The face of this 34-year-old woman, who now lives in Tel Aviv, lights up when she speaks of Be’eri, her kibbutz, a socialist style, collective community, typical of the early days of the Zionist movement. She has nothing but good memories of her childhood there, close to the border with Gaza, in that protected environment where economic realities such as money and shopping had no place. She lived surrounded by friends and animals. Life punctuated by Zionist songs and summer activities. “That was a long time ago,” she says, “Before the economy changed and the socialist dreams went up in smoke.” The Israeli dream at the time was that, living in a community where everyone contributed according to their needs and, above all, according to their abilities.

Michal’s first year in Tel Aviv was “a nightmare”: “I had to budget, to pay for things, to learn all the everyday things I knew nothing about.” Twelve years on, however, she has no desire to return to the kibbutz, as “it’s not the same anymore. People are virtually living in poverty”. The system there became financially inviable, and Michal’s parents recently moved to another, smaller kibbutz in northern Israel. The massive influx of Sephardi Jews [Jews descending from Spain, Portugal, north Africa and the Middle East] and the rise of economic liberalism put paid to the socialism introduced by the Ashkenazim [Jews descending from Germany, France and eastern Europe]. Today, no more than three per cent of the Israeli population, around 125,000 people, spread over 250 kibbutz, are still trying to continue with this way of life.

Free market economics is a top priority for the Israeli state, which intervenes as little as possible and keeps the taxes on its wealthiest citizens to a minimum.

The country has performed well, economically, over the last 70 years. Unemployment is just four per cent, per capita GDP is close to that of Spain or Italy, growth is strong, and it has significant foreign currency reserves. Yet Israel is the OECD country with the highest rate of poverty, with over 20 per cent of the population living below the poverty line. Only Mexico surpasses Israel in terms of the number of poor families.

Ultra-orthodox Jewish and Arab families, which account for nine and 20 per cent of the population, are the hardest hit by this poverty. “Israel’s economic performance comes at a price. Living standards are high, but social divisions have widened,” explains Jacques Bendelac, an economist based in Jerusalem and author of the book, Israel, mode d’emploi (Israel, a user guide). “The people who have not been able to keep up have been left behind,” he remonstrates.

Amongst the most vulnerable are the survivors of the Second World War concentration camps, around 200,000 people, a quarter of whom live beneath the poverty line, according to the figures of the Foundation for the Memory of the Shoah. The 2,220 shekels (US$612) monthly allowance granted by the government provides them with just enough to make ends meet.

In December 2017, members of Israel’s disabled community staged a demonstration on the Ayalon motorway to assert their rights. “Disabled people, until now, have only been receiving 2,342 shekels (US$651) on average,” explains Hanan Tal, director of the association Nekhe, lo hetzi ben adam (Disabled, Not Half a Human Being) that defends the rights of the disabled in Israel.

Around 250,000 Israelis are considered severely disabled and only seven per cent of them are able to work. The figures are damning, placing the country far behind other developed nations.

Four months ago, the Knesset finally agreed to increase their benefits, pledging to allocate an allowance of 4,000 shekels (almost US$1100) per person by 2020. “It’s a serious problem. The outlay of a disabled person is huge. The whole family has to pay, living on credit and getting into debt to have a decent life,” he says. Tal, who prefers to see the glass half full, sees it as a victory, although not the end of the battle.

When reality hits hard

The question is, who is growing poorer in Israel? For Bendelac, the answer is clear: “It’s the middle-class. A family is not able to live off an average salary and symptomatic of that is the food situation.” The food sector is highly protected and uncompetitive in Israel, where the prices never fall – on the contrary.

For the last two and half years, 26-year-old Yehonatan Yovel has been meeting up with a group of people at the entrance of the HaCarmel market in Tel Aviv, every Friday at 4 pm to salvage the unsold produce that will be thrown in the bin before Shabbat starts. The Yesh Lanu Okhel (We Have Food) project is an ecological initiative, preventing waste, but is also an economic and political act. “It’s not just pensioners or Filipinos [immigrants] who cannot afford to eat properly on the money they get,” explains Yovel. “There are young Israelis, sometimes new arrivals, even tourists, who see what we’re doing.”

Yovel has also managed, over time, to set up a number of informal partnerships with the market traders. He gathers the food together and everyone can come and help themselves. This trend, freeganism, allows Israelis to save several hundred shekels a month and to feed a whole family for days or even weeks.

“The real problem is that when you come on holiday you don’t realise how high the cost of living is. You don’t even convert into euros,” says Hannah [not her real name]. She and her husband made their Aliyah [settled in Israel] when their daughter was two years old. They had been coming to visit several times a year, and never looked at what they were spending. But reality soon hit them hard when they became expatriates.

“We came with our savings and it was not long before we became disenchanted. We found ourselves in an apartment with leaks and mould on the ceiling, for a rent three times higher than in Paris,” she recalls, a year after going back to France.

Then she started to look at the cost of everything. She found a solution to the “unaffordable food”: she would take her car and drive out of Tel Aviv to shop at Rami Levy, a discount supermarket chain. “And we still found ourselves having to eat like students, even though we had decent jobs,” she explains. “Our dream was turning into a nightmare, on top of feeling different from the other French people.”

Their dream was to build a long-term future, to integrate, to speak the language, to invest for their daughter. “Many French people come because they think it’s the right thing to do for a Jewish person. But they live like in Paris, spending a fortune. They’re not Israeli at all and forgive Israel for everything, including the cost of living. Because being the ‘chosen people’ comes at a price,” says Hannah, whose belief in Zionism was not enough to convince her to go broke to survive. The finishing blow came when their daughter had to have physiotherapy, twice a week preferably, at a cost of 250 shekels (approximately US$68.70) per session. That’s when she realised the Kupat Holim (health plan) offered very little in terms of social protection, reimbursing just one session a month. Tired of struggling, the family decided to go back to France, just short of two years after moving to the ‘Promised Land’.

Reasons to be hopeful?

The French are not the only ones leaving the Hebrew state. “Around 10 per cent of Israelis live abroad. Economically, it is quite a large figure and rather worrying,” confirms Bendelac. The main reason behind this Israeli migration is the search for a better job with much better pay, enough to be able to afford a decent place to live.

Bendelac remains optimistic nonetheless. The tent uprising in 2011, when Israelis set up homes in the streets to demand affordable housing, was a “real awakening” for the government, he says. The figurehead at the time, 25-year-old Dafni Leef, managed to mobilise 300,000 Tel Avivians to sleep on the streets in tents, in the hopes of bringing down housing prices.

The Netanyahu government was quick to react. On 26 July 2011, the prime minister announced plans designed to add 50,000 apartments to the housing market, half of which would be rented at 30 per cent of their value at the time. He also appointed a committee of experts, which drew up the Trajtenberg Report, named after the economics professor chairing it.

Three major measures were recommended in the report published in September 2011: immediate assistance for the parents of young children; a change in the tax policy, income tax in particular; plus the lowering of house prices and the building of homes to be rented at affordable prices.

Seven years on and the results are mixed. Only 27 out of the 63 recommendations have been implemented, 25 have been partially implemented and 11 have not been implemented at all.

Israeli political parties on the right and left have had to grapple with the economic issue. After 2011, Yair Lapid, founder of the centrist and secular Yesh Atid (There is a Future) party, which has 11 seats in the Knesset, surfed the wave. Most salient in his seven-point programme is the fight against poverty and bringing down the cost of living and housing. His campaigns are pitched at the middle-classes. “The middle-class has become Prime Minister Benjamin Netanyahu’s cash cow,” he decried in January 2013 during a meeting on the economic issue.

“The Israeli economy has good foundations for making stronger progress in the years to come. But if there is no change in economic and social policy, the country is going to leave even further behind the Israelis without the ways or means of finding a place in society.” In Israel, everyone seems to be waiting for Prime Minister Netanyahu to make a historic gesture. But he is failing to meet the expectations on these issues.

This story has been translated from French.