High cost of living

1. Claim: There is an unreasonable gap between Israelis’ salaries, and the cost of living in Israel, particularly the cost of housing – heard from Israeli protesters across social sectors (supported by mainstream Israeli citizens)

This claim is perhaps the underlying drive of the entire protest. There is a deep socioeconomic gap across all social sectors (with the exception of fewer than 20 extremely wealthy families). Israelis are simply unable to make ends meet. Even the top 10 percentile ofIsrael’s earners report struggling to meet their mortgage payments each month.

  1. a.      Background: Israel’s economic history

Income Inequality: Israel and the OECD states:

Changes in Average Housing prices in Israel:

The World Bank estimates that 1/4 of financial activity inIsrael is not reported to the tax authorities, one of the highest percentages in the Western World. This finding would suggest that efforts to alleviate the current situation should focus on taxing those who are currently evading the authorities, rather than increasing the taxes for those who already pay them.

  1. b.        Current: Recent middle-class protests in  light of the above:

Mothers’ Protest: Based on the Law of Mandatory Education in Israel, the government pays for education from age 5 to 18, overlooking early childhood education. Mothers who must work to support their households pay nearly their full salaries in early childhood education costs. Parallel protests include the Doctors’ Strike, and Social Workers’ Strike. The frustration expressed in these protests stems from a growing burden of expenses that the government once subsidized but has since retreated from. The middle class fears that they have no financial safety net, and they are simply not making ends meet.

  1. c.       Possible Solutions:
    1. A dominant faction of the active protesters is made up of socialist youth movements and organizations, using the protest to promote their agenda that Israel should move towards its former welfare state structure, with a more highly government-regulated market.
    2. On the other end, the capitalist powers claim that the current system is on the right track, but not yet efficient enough. The government should promote more competition, lower bureaucracy, and fight against the monopolization of capital. (See  “Jews and Capitalism”)
    3. A third, middle-ground solution: a mixed economy or social democracy. This approach acknowledges that perhaps the government needs to distinguish between public needs and public wants. Needs might include products such as diapers, bread, dairy products, and shelter, and these prices would be set and controlled by the government. Wants, on the other hand, which might include technological products, arts consumption, travel abroad, and brand-name products, would be left to the free market, which would be truly free from monopoly and corruption.

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