Israel's Standard of Living Compared to Europe and the U.S.
by Shira Sorko-Ram
Despite the world’s financial slump, Israel has fared fairly well. The shekel is strong. The unemployment rate is about 6% and is expected to fall to 5.8% this year – an all-time low. Growth rate for this year is expected to be about 4.5%. All this, with boycotts in Europe against Israeli products, almost no commercial interchange with the surrounding Muslim countries and the need for continuous massive upgrading of Israel’s military for survival.
Israel’s economy is amazing. Yet, for the individual average Israeli, life is far from easy. Israelis pay close to twice as much on essential products compared to the U.S. and European counterparts when wages are taken into consideration.
The monthly income of the average American is $3,770 and in large cities around $4,930. The British average is Sterling ₤2,700 ($4,350) (Jerusalem Post, 21June2011). In contrast, the average Israeli paycheck is $2,500. It must be kept in mind that because of the extremely successful hi-tech business in Israel producing very high wages for that section of the labor market, the average is somewhat skewed – the actual paycheck for most ordinary citizens is somewhat lower.
Higher prices for essentials include food, transportation, phones and internet connections and just about anything else you can think of. In the U.S., gasoline at this writing is about $3.60 a gallon while in Israel it is $8.35. A new vehicle is double that of one in the U.S. (Ibid.)
How does a working couple making $5,000 before taxes pay $1,000 to $1,500 for a three room apartment in Tel Aviv, buy a small car, and feed a couple of kids? They go very light on the bubble gum and ice cream cones! Even though Israel’s debt to its Gross Domestic Product (GDP) is a comparatively low 76% to the U.S 93% and Great Britain 81%, Israelis still work almost half a year just to pay their taxes. (ozar.mof.gov.il/debt/gov/about.asp)
HERE’S WHERE IT HURTS!
One of the main reasons for such high taxes is that there are two large communities in Israel who do not work: The ultra-Orthodox Jews, especially the men, and Israeli Arabs, especially the women. The haredim (ultra-Orthodox) constitute 8-10% of the population, and are growing very fast. And they don’t work or serve in the army. Realizing the seriousness of this growing phenomenon, the government gave the haredi community $87 million last year alone for job training and day care subsidies – which did result in a “significant increase” in haredi women entering the workforce.
However, there was virtually no increase among the men. (JP 28Mar2011) The haredi men continue to spend their entire lives studying their rabbinical books and expect the taxpayer to fully support them and their families, including providing them with free health care and pensions. Today there are some 500,000-700,000 haredim in Israel in a Jewish population of six million. (Wikipedia Haredi Judaism) Their numbers will double in 15-20 years.
Bank of Israel Governor Stanley Fischer, American-born world famous economist says, “Poverty in Israel is very complicated. Outside the haredi (ultra-Orthodox) and Israeli Arab communities, poverty has not grown. [But] part of the population has grown, does not work, and this cannot go on. If we don’t change the conduct in the labor market for these two communities, there will be a very big and worrying problem.” (Globes, 21Jun2011) Indeed, a University of Haifa report warns if current demographic trends continue among, haredi Jews and Israeli Arabs, Israel may cease to exist! Yes, that is what this scientific report says. (JP 3Apr11)
The report, entitled “Israel 2010-2030, on the Path to a Religious State,” concludes that by the year 2030, the majority of Israel’s Jewish population will be religious – [ultra-Orthodox, Orthodox and traditional] a reality that could lead to several different results, including an increase in poverty and - Israel’s deterioration into an anti-democratic country. The report, compiled by Professor Arnon Soffer, warns that the growing haredi population will place an intolerable economic burden on the rest of the population, even causing secular Jews to leave the country. Because the haredi population refuses to work, they have created “a situation of total dependence on the income-earning population,” causing ever increasing “dissatisfaction, bitterness and feelings of suffocation among taxpayers,” according to the report.
The higher haredi birthrate will only increase their voting power in the political arena, enabling them to extract greater and greater benefits for themselves through their political parties, says Prof. Soffer Israelis and their (few) global friends usually concentrate on the grave existential dangers coming from every direction outside of Israel’s borders. But this professor is calling for government investment in teaching democratic values in the Israeli education system, because if current demographic and religious trends within the state continue, the future of Israel as a democratic, economically sustainable state is in great danger. (Ibid.)
Certainly, those of us who lead Messianic Jewish congregations are witness to the great difficulties of our members, most of whom are average-income citizens. Many of our believing children do not enjoy even basic necessities or opportunities to develop their God-given gifts – some do not have money to buy school books. For these reasons, Maoz’ humanitarian aid through istandwithisrael.com has been and will continue to be a tremendous service to the Body of Messiah giving critical aid to the believing children and their families throughout the country.