Israel’s Annual Poverty Report: Poverty Decreased in Arab society But Rates Remain High

Israel’s National Insurance Institute (Bitu’ah Le’umi) released its annual Poverty Report at the end of 2017. The Report, which presents figures for 2016, shows overall improvements in the reduction of poverty and inequality in Israel compared to previous years. Still, relative to other developed countries, Israel status remains troubling, having the highest poverty rates among OECD member states. (full report in Hebrew).

Being poor in Israel in 2016 meant earning a monthly income of less than NIS 3,260 ($920) for an individual; less than NIS 5,216 ($1,480) for a couple; and for a family of five less than NIS 9,779 ($2,800). Overall, poverty rates in Israel decreased from 19.1% of families in 2015 to 18.6% in 2016 – or a little more than 1.8 million people.  In 2016, data was presented on the Bedouin population for the first time in four years. The Bedouin population represents some of Israel’s highest poverty rates. Factoring out the Bedouin community, the poverty rate in Israel in 2016 would have been 18.1% of families, lower by one-half percent.

Poverty rates remained very high among single parent families (accounting for 33% of poor families in Israel), among the Jewish Ultra- Orthodox community (accounting for 15% of poor families in Israel) and among Arab society (accounting for 39% of poor families in Israel). Over half of the poor families in Israel are working families, not solely reliant on welfare.

In Arab society, despite poverty rates remaining very high, similar improvements in the reduction of poverty as those in Israeli society overall are apparent:

The rate of poverty among Arab families has decreased significantly – from 53.3% in 2015 to 49.4%. If the Bedouin population is not included then the decrease was even greater. The depth of poverty, or the gap between family income and the poverty line, and the severity of poverty, an index measuring a number of parameters, also each decreased dramatically in Arab society, each between 7% and 8%.

The drop in poverty rates is attributed in the report to a number of general processes affecting all of Israeli society, including the rise in the minimum wage, enhancement of children and elderly allowances among other governmental policies to support weaker populations, and an increase in employment rates. Among Arab households, employment rates increased in 1.2% during 2016. (compared to 0.4% increase in employment among Jewish household).[1] Arab society has been exhibiting a gradual drop in poverty rates since they peaked in 2012.

Similarly, the percentage of poor Arab children (without Bedouins) also dropped from 66.2% in 2015 to 60.9% in 2016.

In the Bedouin community, about 58% of Bedouins and close to 70% of Bedouin children are considered poor.[2] Some of these high poverty rates are attributed to the correlation between the number of children per family and the risk of being poor in Israel (In 2016, around 64% of families with five children or more were poor, compared with 17.5% of families with up to three children). While the birthrate in Arab society has been dropping steadily and the overall average children per family now compares with that of Jewish families (around 3.2 children at average), most of Bedouin families have more than 5 children.

Overall, despite improvements, Arab society remains significantly poorer than Jewish society, with Arabs representing around 39% of all poor families in Israel, while constituting only 15% of families in the society.

[1] Unemployment rate in Israel overall decreased from 5.3% in 2015 to 4.8% in 2016)

[2] These numbers refer only to Bedouins leaving in recognized villages. Estimates are that poverty rates of Bedouins living in the unrecognized villages are higher.