I’ve made the point repeatedly that Israel’s cost of living — and more presciently the average real income — presents a major problem for the country’s future.
My motivation for writing about these dynamics is two-fold.
Firstly, for the future of Zionism, I think that Israel needs to be a country that everybody can afford to live in. Whether they’re a bus driver or an algorithm engineer.
Secondly, to my mind, this dynamic is perpetually ignored in Israeli elections, of which there have been many recently.
Statistics mount but these issues receive relatively scant attention in Israeli political discourse which, recently, has been almost entirely occupied by the question of whether the incumbent Prime Minister, Benjamin Netanyahu, is fit to remain in office. Israeli voters also seem unwilling to make this issue a priority.
Some of these statistics are more recent and some are older. They’re not intended to criticize Israel. But rather to make the case that, collectively, they show that Israel needs to do more to ensure that it is an affordable place to live.
2nd Most Expensive Real Estate In The World (Relative To Income)
Israel was recently ranked second out of 39 countries for real estate prices. According to The Jerusalem Post, Austria-based Compare The Market clocked in Israel’s real estate as costing $9,780 per square meter on average.
The research, the newspapers said, considers the price of property in relation to the average income in a country.
Israel ranked below South Korea but above Switzerland, Luxembourg, and Japan.
8th Most Expensive Cost Of Living
Last year, CEOWORLD Magazine listed Israel as having the eighth highest cost of living in the world.
According to The Jerusalem Post, CEOWORLD’s ranking were based on five metrics: cost of living, rent, eating out, groceries, and purchasing power.
Israel’s position at number eight on the league table placed it above Ireland (13), the UK (27), the UAE (32), Singapore (9), and Hong Kong (11).
2nd Highest Prices in OECD Except Japan (Relative To Income)
The Times of Israel cites Gilad Brand as stating that, relative to other OECD countries, Israel’s cost of living was higher than in every OECD country except Japan.
Note: This article is several years old.
It Takes 148 Monthly Salaries To Buy A Home
The above article also cites Eitan Regev of the Taub Center for Social Policy Studies in Israel as stating that the number of monthly salaries required to afford a downpayment in Israel is 148, more than double the equivalent figure for the US (66).
Regev said the trigger for this impoverishment of households was the market rise in the prices of housing. Prices have risen 6 percent a year since 2007 and it now costs 148 monthly salaries to buy a home here, compared with 76 in France and 66 in the U.S
42% Of Israeli Households Have Overdrafts
For many Israelis, affording Israel is about living in ‘minus’ (pronounced ‘mee-noos’ in Hebrew; translation: overdraft).
Some eye-popping statistics about the prevalence of living in debt were published last year.
According to research from the Central Bureau of Statistics (based on data from 2018):
- 42% of Israel’s households had an overdraft in at least one of the past 12 months
- 22% of households reported having an overdraft in 10 or more months in the past year
- 29% of households had loans not related to mortgages
1.8 Million Israelis Live In Poverty
1.8 million Israelis, half of them children, live in poverty.
That figure placed Israel second to bottom in the OECD’s poverty rankings, according to the Times of Israel.
The data did not include East Jerusalem residents.
The rate of poverty among Arabs remained higher than the general population, at 44.2%.
Relatively High Income Inequality
The Gini coefficient is an estimate of the level of income distribution in a society.
Israel retains relatively high levels of income inquality, according to national statistics.
Salaries in Israel’s technology sector dwarf those paid out to the rest of the workforce. In fact, the difference is more than two-fold.
Coupled with the relatively high poverty levels, it isn’t hard to see why income distribution in Israel remains reasonably unequal.
Tel Aviv 7th Most Expensive Expat City
CNBC recently totted up the cost of living in 2018 cities in 121 countries and found that Tel Aviv had the seventh highest cost of living for expats.
That reporting was based on findings from ECA International.
Average Salary 11,459 NIS / Month (But Technology Is Almost Double!)
Salaries in Israel are quoted monthly in the New Israeli Sheqel (NIS).
At the time of writing, the latest figures show that the national average salary was 11,459 NIS. However, the technology sector had a separate average of 24,773.
At the exchange rates prevalent at the time of writing, that puts Israel’s national salary, annualized at:
By contrast, salaries in Luxembourg, which was one place “ahead” of Israel on CEOWORLD’s cost of living ranking, are close to €66,000.
Salaries in Singapore, however, which was one place “behind” Israel on CEOWORLD’s cost of living ranking, are more comparable to Israel’s.
According to the Singaporean Ministry of Manpower (MOM), the latest median gross monthly income is $S 4,534 = $3,397 (USD). That equates to an annual income of $40,764, slightly less than Israel’s.
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