Higher old age pensions fail to halt poverty

from Globes

An larger number of wage-earners has fallen below the poverty line.
Shay Niv

The National Insurance Institute today published its semi-annual Poverty Report for the first half of 2007, which shows a slight increase in poverty across all variables measured. The report belies forecasts that the increase in old-age pensions would reduce the prevalence of poverty.

The National Insurance Institute, under its new director general, Esther Dominici, tried very hard to demonstrate that there were no substantive changes compared with the 2006 Poverty Report. The word "stability" appears repeatedly in the current report. However, an examination of the numbers indicates an increase in the prevalence of poverty.

The current report states that 1,674,800 Israelis live in poverty, 25,000 more than in 2006. The proportion of poor rose to 24.7% of the population from 24.5%. The number of families living in poverty rose to 420,000, and their proportion rose to 20.5% of all families, from 20% a year ago. The poor family income gap, which expresses the gap between a family's income and the poverty line, widened slightly from 33.8% to 34%.

The 2007 Poverty Report also shows a renewed increase in the number of poor children, after the 2006 report showed that the ten-year increase in this figure had halted. The proportion of children living in poverty now stands at 35.9%, more than one in three.

The biggest surprise in the present report related to the condition of the elderly. Belying all expectations that the increase in old-age pensions would reduce the number of elderly poor, the proportion actually increase from 21.5% in 2006 to 23.5% in 2007.

The most worrying trend is the continued increase in the number of working poor. The prevalence of poverty among families with one breadwinner rose from 22.6% in 2005-06 to 23.9% in 2007.