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2014-2015 Annual Assessment

The status of the Jewish people’s resources improved over the past year. Israel’s economic performance has been positive over the past decade compared to most of Europe. Israel’s GDP has grown. This growth includes the development of natural resources off Israel’s shores and in the Golan Heights. The most recent estimate of growth in 2014 was 2.9 percent, smaller than predicted, but recorded in a year that saw a 50-day war. The average growth among OECD countries was 1.9 percent. Median income has been increasing as well. Similarly, according to financial news reports, the material resources available to Jews in the Diaspora also grew.

Nevertheless, a number of concerns present themselves. The first, which seems to have had expression in the recent elections to the Knesset has to do with the high cost of living and income disparities in Israel.

In 2011, Israel’s price level was 5% above that of the OECD on average. In 2014, the difference had risen to 12%. Between 2008 and the 2013 the cost of buying an apartment rose by 55% in relative terms with rental prices up by around 30%. (Housing cost increased only 2% annually from 1967 to 2008.)

Similarly, aggregate economic data mask growing disparities. The ratio of disposable income between an individual in the 90th percentile and an individual in the 50th percentile (i.e., the median) in Israel is 2.32, the highest among all OECD countries. Similarly, the ratio between the median and an Israeli in the 10th percentile is 2.75, again the largest gap in OECD.

Another concern is that of adequate investment in the future, both in Israel and the Diaspora.

In Israel, it is likely that recent modifications aimed at integrating the ultra-Orthodox into the Israeli workforce adversely affect long-term economic investment. Two decisions made by the current government – returning child subsidies to their previous level and decreasing the number of those who need to enlist in the IDF, run counter to the incentives created to join the workforce. The latter, being one of the most effective ways to gain the advanced skills necessary for the job market.

Regarding Diaspora Jews, here too, despite what seems to be an increase in resources, there is inadequate investment in Jewish identity. Analysis of up-to-date Pew statistics reinforces the notion that the high cost of programs that build and strengthen Jewish identity discourages many potential participants. From among the non-Orthodox community in the U.S. participation levels in such programs from families that earn over $100,000 a year stand at 34 percent while participation for those earning under $100,000 is only 17 percent. Because of these concerns, despite the overall growth in resources, JPPI has left the Material Resources gauge unchanged from last year.

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