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Thursday, May 16, 2013

'Allowances don't take people out of poverty, they keep people in poverty. Work brings people out of poverty'

The quote in the title of this post comes from Finance Minister Yair Lapid, and I actually agree with it in principal. But....

You can't just cut off welfare payments from 10% of your population cold turkey and expect your economy to immediately create enough jobs to offset that. Worse, it makes no sense to continue the welfare payments to those segments of the population who are already working without instituting a means test.

Here's the story behind the quote.
Responding to criticism of his recently approved budget, which cut child allowances, and an OECD report that pegged Israel’s poverty level in 2010 as the highest among developed countries, Lapid told Israel Radio, “Allowances don't take people out of poverty, they keep people in poverty. Work brings people out of poverty." Lapid pointed out that in Israel, two groups contributed to overall poverty more than any other: the ultra-Orthodox and the Arabs. “It is already sad that there are groups that are predefined as poor," he said, arguing that his budget and upcoming reforms would push those populations into the workforce in greater numbers.

Lapid also said that while he understood popular anger at his budget, his critics "simply don't know the details. In a year they'll say thank god there was a responsible hand at the wheel." "For example I'm not harming the middle class, I'm helping the middle class,” Lapid said. While it’s true that Ricky Cohen, the fictional embodiment of a middle class woman Lapid introduced into the national conversation, would have to pay more taxes on her monthly salary, that money was being invested into a better future, Lapid argued.

Speaking on the same program, National Insurance Director-General Shlomo Mor-Yosef said the poverty problem was more widespread. "It's not just people who don't work,” he said. “Working people are also under the poverty line." Defending his agreement with Histadrut Labor Federation Chairman Ofer Eini, Lapid said that a negotiated agreement was best for all sides. The Histadrut, he said, gave up NIS1.5b. for the budget, and the agreement allowed them to avert a costly strike. One week of striking, he said, would impose enough damage to necessitate a doubling of the tax increases he had proposed.

"You can declare a war that will get a week of headlines, but won't net the state a dime,” he said
Yes, sending people to work will get them out of poverty... if they make enough money to support themselves. But cutting off all welfare benefits without any time frame for people who can't or don't work is going to throw thousands more people into poverty, and worse, the fact that there are so many 'working poor' shows that many of the jobs generated by the economy simply don't pay enough.

In the taxi home from the airport on Monday, the driver was telling me about an interview with the former director general of the Finance Ministry, who reported that the tax breaks that Israel gives to its largest corporations, which are controlled by 12-18 families, come to NIS 14 billion per year - enough to balance the budget. He urged ending those tax breaks before we do anything else.  The government always claims that without those tax breaks, those corporations would leave. Well, they either can't (because they control things like food distribution and petroleum refining for local consumption) or they won't (because they aren't going to find the kind of high tech brainpower that exists here anyplace else in the world). But since we cannot directly elect our MK's, we have no say in how they vote....

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At 7:55 PM, Blogger Eliana said...

Carl, I am in total agreement with you on this.

Trying to starve people into going to work when the jobs aren't there is wrong-headed and downright cruel.

Further, the endless smearing of the Haredim makes it unlikely that they would be hired even if the jobs existed.

They are treated as incredibly stupid for not learning multiplication tables as a kid in a class (as if everything in life depends on this and as if the Haredim don't know how to count or multiply).

Lapid is trying to box the Haredim in so that the only way for them to survive would be to break up and scatter to the winds among seculars in Israel. This isn't going to happen, though.

The Haredim are being attacked in Israel on too many fronts to count (not the least of which is this Women at the Wall business).

We're living in an age where too many people are like Hellenists in thinking that Judaism is outdated and they are embarrassed to be associated with it (like the ancient Israelites who wanted to play sports in the buff with the Greeks but were embarrassed by their appearance in this situation). Some used plastic surgery to "correct" it.

This has to stop and I wish Naftali Bennett would move forward to do it (as he said he would in his campaigning for the Jewish Home party last year). He told Haredi leaders that he wouldn't let people hate or attack them (I forget the exact wording he used).

Bennett is still saying that he's 100% behind Lapid (although Bennett had to shelve his referendum bill because Lapid isn't 100% behind Bennett).

Israel has got to fix this situation with or without Bennett's help.

If Lapid and company did all these things to the Arabs in Israel, they would be arrested for incitement and racism.

At 9:17 AM, Blogger Chana said...

Seriously, Eliana? All those years the חברת הלומדים have built their very subsistence around the package of government handouts as though they were still living in the midbar and receiving the manna, (the taxpayers, of course, deserved no gratitude) and now, after years and years of warning signs that this was going to end one day, the taxpayers owe them a grace period?


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