Gap between rich and poor growing wider
JERUSALEM -- The widening gap between rich and poor in Israel is nowhere more apparent than on Agrippas Street in downtown Jerusalem near Mahane Yehuda, the colorful fruit and vegetable street market.
Upscale restaurants and workers' eateries jostle for space along the crowded street, including the Carmei Ha'Ir restaurant, where this week David, a regular diner, was at his usual table next to a large fish tank.
''The food here is very good, first class, and the service is good," said David, who preferred not to give his last name. ''Please will you join me for some lunch? It's on me."
There was no check for David at the end of the meal because this unique restaurant is a soup kitchen where diners can expect courteous waiter service and a cheery welcome whether they can afford to pay or not.
The growing clientele of Carmei Ha'Ir reflects a worsening social crisis in Israel, which figured large in the general election.
Newly elected Prime Minister Ehud Olmert's centrist Kadima Party won only 29 seats in the 120-member Knesset, far less than predicted. Voters gave unexpected support to the economic program of the Labor party, which promised a 33 percent rise in the minimum wage to $12,000 and more money for health, education, and social welfare.
What's more, a stunning seven seats also went to the new-born Pensioners' Party, whose platform demanded mandatory pensions for workers, a raise in the state pension, and dignified compensation for elderly Holocaust survivors.
''We will have to change priorities regarding social issues and this is of utmost importance for economic stability," Olmert told reporters after the election. ''We want to bring about a reduction in social gaps, an increase in employment and a reduction in the number of people in distress."
At Carmei Ha'Ir, the homeless and unemployed and families on welfare share tables with workers from the local market. Tourists are stunned to discover they pay whatever they like. According to Yair Harosh, the soup kitchen's founder and director, one man recently left a check for $5,000 in the box by the door, which serves as a cash register.
David says he lost his regular job as a janitor at a rabbinical college three years ago, and he's had trouble making ends meet ever since. His hands are disabled, so he eats directly off the plate and drinks soup through a straw. None of that is a problem at Carmei Ha'Ir, where he's welcomed by staff and fellow-diners alike as an old friend.
''Before, I was kind of ashamed to go into a soup kitchen. I had my pride. But the food here is like you'd buy in a restaurant. And the people here are very nice. They help you whenever they can," said David, who immigrated to Israel from his native Indiana 31 years ago.
''These are very tough times," said David. ''There was the bombings, the security situation, and with the security situation a lot of economic and social programs went down. . . . They could start that bombing again and everything will turn back to security. It got so bad. Now the people are saying so much for security. Let's get to the basic things of people eating. Food."
Carmei Ha'Ir opened three years ago serving 100 meals a day. As Israel's economy has declined, the kitchen's work has expanded. Each day its volunteer staff serves 500 diners in the restaurant, prepares and distributes 400 sandwiches for poor schoolchildren and makes 200 weekly supermarket-style deliveries of fruit and vegetables to impoverished families.
Internal Revenue inspectors turned up recently demanding to see the books. Harosh explained to the disbelieving civil servants that the meager earnings paid only a fraction of the expenses. Carmei Ha'Ir is currently half a million dollars in debt, owed to their bank overdraft and suppliers, Harosh says, and are looking for donors to help out.
After eating lunch, the inspectors each dropped a 100-shekel bill (about $20) into the box.
''It's the first time anyone ever got any money out of the Israeli Internal Revenue," laughed Harosh.
From the outside, Israel's economy looked in good shape even before Warren Buffet's Berkshire Hathaway Inc. agreed last Friday to pay $4 billion for 80 percent of Iscar, an Israeli machine tools manufacturer. The deal, which sent the Tel Aviv Stock Exchange soaring to record levels, also created a $1 billion tax windfall for Olmert's new government, and nearly equaled the entire foreign investment in Israel for the whole of 2005.
''In 2005, Israel's economic recovery continued and became even more firmly based. GDP grew rapidly by 5.2 percent," said Stanley Fischer, governor of the central Bank of Israel, presenting his annual report on the Israeli economy last month.
Foreign investment in Israel is at an all-time high, last year topping $5 billion. The shekel is steady against the dollar and other major currencies, and unemployment which soared in the early years of the intifada is back down to around 9 percent after peaking at 10.7 percent in 2003. More than 1.9 million tourists arrived in Israel in 2005, a 27 percent rise over 2004. And per capita GDP rose from $5,612 in 1980 to $16,452 in 2003.
But the headline figures hide a growing ''social gap" between rich and poor that has been troubling commentators for some time.
The same day the Iscar deal was announced, Olmert increased bread prices by 7 percent. The Pensioners' Party threatened to quit the government, saying the measure disproportionately hurt the poor and the elderly. The showdown imperiled Olmert's thin parliamentary majority.
Highlighting the growing gulf in incomes, the Israeli financial daily The Marker reported that in 2005, salaries of the 120 most senior executives of public companies listed on the Tel Aviv Stock Exchange rose an average 48.5 percent. Meanwhile, the average Israeli wage remained stuck at around 90,000 shekels ($19,500).
According to figures compiled by the Adva Center, which compiles information on equality and social justice in Israel, child poverty levels rose sharply from 1977, when 22.9 percent of children were beneath the poverty line to 2005, when 34.1 percent of children were in that bracket.
According to Shlomo Swirski and Etty Konor-Attias, authors of ''Israel: A Social report 2005," the widening gap between rich and poor occurred even as Israel was experiencing steady economic growth.
''Growth alone does not guarantee general prosperity," they wrote. ''During the 1990s, the fruits of growth in the Israeli economy were unevenly distributed. . . . The income of persons in the top income bracket continued to grow during the first years of the second intifadah, 2001 and 2002, whilst most of the population experienced a drop in their standard of living."
The man most popularly blamed for the widening gap is Likud leader Benjamin Netanyahu, whose Likud party took a drubbing in the election. He was finance minister from 2003 to 2005 and oversaw a series of budget-slashing measures, which many agree saved the Israeli economy from collapse, but whose burden fell mostly on the poor.
Netanyahu also championed the privatization of a series of state monopolies. The result was increased competition and lower prices, but ownership of the major industrial companies in Israel became concentrated in the hands of a tiny elite of wealthy families.
Ari Shavit, commentator for the Haaretz daily, said the election results showed Israelis voting to roll back Netanyahu's initiatives.
''Social-democracy is back. After a long period of moral coma, the Israeli nation is once again demanding justice," wrote Shavit.
According to social activist Eliezer Yaari, director of the New Israel Fund, there is a clear link between the acceptance of Olmert's diplomatic initiative to dismantle settlements and his social policy.
''This election showed that there is a readiness for concession and a deep understanding that growth, personal security and economic stability cannot go with occupation," said Yaari. ''If people want to assure a certain well-being to their children, certain things have to be given up, including occupation."