THE WORLDPOST
05/20/2013 11:53 am ET

Israeli Families Struggle With High Cost Of Living, Lack Of Government Support

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By Linda Gradstein/The Media Line

Shaiel and Charlie (short for Charlotte) Yitzhak both work hard – he as an English teacher, she as a physical therapist working with wounded Israeli soldiers. Shaiel also tutors English privately and runs a summer camp for robotics.

They have two young children, ages 3 years and 18 months, and they’ve just purchased an apartment in Jerusalem. By appearances it looks like the life of the Yitzhak family is going as planned, but Shaiel tells The Media Line that they are barely making ends meet.

“Together we make about $3,500 after taxes and it is all eaten up by our mortgage and child care,” Shaiel explained. “We’re using up whatever savings we had because we don’t want to go into overdraft.”

“Overdraft,” by the way, means going into the red in their bank account, which must then be repaid with interest the following month.

Shaiel says they almost never go out for “date night,” because they don’t have the disposable income to spend for a babysitter, dinner and a movie. The couple doesn’t take vacations and they watch their purchases carefully.

“I was making the same salary ten years ago and it went a lot further,” he told The Media Line. “Food is more expensive; car insurance and gas are more expensive while salaries have barely gone up.”

The feeling expressed by the Yitzhak family is borne out by a new report released by the Jerusalem-based Taub Center for Social Policy.

“We don’t grow fast enough economically and there is a growing gap between different parts of society,” Eyal Kimhi, the Taub Center’s deputy director told The Media Line. “Certain population groups are not participating in the labor market, then they are left behind and the gaps are growing between them and working parts of society.”

The participation rate of ultra-Orthodox men and Arab women in the labor force is low, he says. In addition, young families like the Yitzhaks are seeing their purchasing power decline.

“Until 2005, these young families were doing pretty well,” he said. “Now they feel they are being left behind.”

Students are also suffering. Shaked Nehemya, 22, has just completed her BA in healthcare policy and is about to start a masters program in political communication. She works full-time as a secretary in the Prime Minister’s Office and will pay her own tuition of $4,000 per year. She lives with her parents to save money.

“I hardly ever go out and I don’t see how I’ll ever be able to buy an apartment,” she told The Media Line. “I think the government has to do more to help young people get housing.”

That was the focus of the social protests that rocked Israel during the summer of 2011 and have recently re-appeared. These demonstrations also led to the meteoric rise of the Yesh Atid party, which scored the second-highest success among political parties even though the January election was its first time out. The party, which claims to represent the middle class, is headed by Yair Lapid, whom Prime Minister Binyamin Netanyahu tapped to serve as Finance Minister in the current government. Lapid has raised the ire of many who voted for his party with his budget that increases taxes and cuts social benefits such as child allowances.

Despite campaign promises to slash governmental largesse long provided to the ultra-Orthodox community, the new budget seems to keep many subsidies for the ultra-Orthodox in place. This issue is intense to Israelis because the men are allowed to opt for full-time religious and are excused from the army service that is mandatory for other citizens. The resentment comes with the belief that the obligation to defend the nation is not being share equally.

“We want to find ways for this community to join the labor force,” Yesh Atid lawmaker Dov Lipman, an Orthodox rabbi, told The Media Line. “They want to do it and we have to help them.”

Shaked Nehemya says the government has already built housing projects that ultra-Orthodox families can afford. Now, she says, it’s time to build homes for young people.

Like its citizens, Israel’s government has also been spending more than it takes in. Israel’s budget deficit is its largest ever, some $11 billion dollars. The Taub report finds that in 2011, Israel’s interest payments reached almost $11 billion as well, more than the entire amount the entire country spends on education.

“It is a country brimming with outstanding potential,” the report finds. “At the same time it is advancing along very steady multi-decade socioeconomic trajectories that are simply unsustainable for the future.”

Read more from The Media Line.

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