Adva Center presents a surge in socio-economic disparities in Israel in the last two years

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by Ifi Reporter Category:Capital Market May 1, 2022

The report of the Adva Center, the center for social democratic policy, shows a surge in socio-economic disparities in the last two years: the education system does not provide solutions for the most vulnerable populations, the accessibility of the weaker sections to health is harmed and significant disparities in the housing market.
On the occasion of just over two years since the Corona crisis, the Adva Center publishes its annual report, entitled "The Plague of Inequality Continues."

"The corona plague has not yet passed from the world, even though it has been pushed to the margins of the agenda," the report's authors explain. "The same plague that caused the deaths of millions of people has led to the collapse of many businesses, to unemployment at rates unknown since the era of the economic crisis of 1929 and enormous government spending." The data in the report, they say, tell the story of the expansion of inequality in Israel in the first two years of the epidemic.
"The social picture that emerges from this document is a picture of edges moving away from each other," explains Shlomo Svirsky, academic director at the Adva Center and another of the report's authors. “An upper end that enjoys financial, high-tech and real estate wealth and a convenient taxation policy, and a lower end which already at an early stage of life finds itself in the path of closed gates. The state's capabilities to deal with socio-economic inequality are diminishing, due to insufficient resources. "If we want more universal and generous services, we must raise their level of funding, that is, the level of state revenue from taxation, especially from high-income earners and wealthy capitalists."
One of the main conclusions of the report talks about exacerbating the social disparities in the two years of the corona so that the rich got richer, at the same time as the poor became poorer. "The corona plague has caused a slowdown in economic activity, the closure of businesses and widespread unemployment. At the same time, the financial assets held by the public have actually increased," the report's authors explain.
In 2019, the year before the corona plague, the total financial assets held by the public stood at NIS 4,061 billion - the highest amount ever before. This number represented a jump of 10.3% compared to 2018. And here in 2020, the first year of the epidemic, the financial assets held by the public continued to grow - by 8.5% - reaching NIS 4.406 billion.
The increase, they explain, was mainly due to the fact that the economic crisis caused individuals and institutions to invest their money in the capital market and not in actual economic activity - for example, in equipment, machinery or industrial buildings. "The enrichment of Israel's rich could have seeped into the entire population, had the taxes paid by the rich increased at a rate similar to that of their wealth and thus would have allowed the state to invest in the services it provides to all citizens," the report said. "But while the financial assets held by the public increased between 2015 and 2020 by 31.6%, the state's tax revenue increased by only 14.5%."
The report also points to significant gaps in the housing market in the country. "The general average hides large gaps between households on the basis of age, origin and income level. Beyond age and marital status, the housing issue also reflects gender, national, class and sectarian differences."
According to the report, among the Arab citizens of Israel, whose localities suffer from a lack of land for construction, ownership is the main housing arrangement: the ownership rate is very high - 81%. Among Jews, the origin group with the highest rate of homeless households is that of immigrants from the former Soviet Union: 43% of them do not own a home. Among Ethiopians, the corresponding rate is 40.5% and among the two largest origin groups, Ashkenazis and Mizrahis, the proportion of households without an owner-occupied dwelling was relatively similar: 25.4% and 23.3%, respectively.
The worsening of the gaps is largely due, according to the authors of the report, as a result of the inequality in the education system, which stood out especially in the two years of the Corona, during the entire period when Israeli students had to learn from home remotely. According to them, the effects of this period will be seen for a long time to come. "The extraordinary success of the high-tech industry in Israel, which has created a layer of high-wage earners, is causing many Israelis, including senior politicians, to adopt a social vision aimed at transferring more and more workers from other industries to the high-tech industry," the report explains.
"The realization of the high-tech vision requires, first and foremost, educated workers. And here, the Israeli education system is far from meeting these basic conditions. Those who meet the admission requirements for academic institutions have increased, albeit less. On the other hand, the rate of beginners in academic studies has not changed and remains low. "
According to the report, the ultra-Orthodox and Bedouin Jews in the Negev are the two most vulnerable population groups. However, once they drop out, there is a big gap between them when it comes to state responses: in the year before Corona (2019-2018) only 27% of the students who dropped out in the Bedouin localities had some educational response compared to 65% of the students who were under ultra-Orthodox supervision. In 2020-2019 the situation of the Bedouin dropouts worsened further and only 15% of them found an alternative framework. The number of students dropping out of the upper division of Hebrew and Arab education, for which no alternative framework was found, was 7,243 in 2019-2018 and 6,737 in 2020-2019. The dropout condemns them to a life of extremely limited possibilities.
Another significant conclusion derived from the report data speaks to the impact of the lack of a national policy to eradicate food insecurity on widening social disparities. The report points to the latest data from the National Insurance Institute published in the 2021 Poverty Report, indicating a decline in food insecurity, according to which, in parallel with the general decline in food insecurity rates, the trend of marked inequality by population groups continued.
The data in the report also show that there is a significant gap in the health services that Israeli residents receive. "Quite a few studies show that a low-income population may find itself in a situation where its access to health services will be harmed," the authors explain.

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