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Israel policy myth #4: Our un-American social safety net

As Israelis rise in social protest, they comfort themselves with the thought that our safety net is at least better than that of the ultra-capitalist US. They are wrong

The unscheduled and unfortunately long hiatus in the Israeli policy myths series coincided with the unprecedented rise of the current social protest movement. This movement has brought the enormous erosion of Israel’s social safety net to the forefront of public discussion. Yet, if anything, Israelis are underestimating how bad things have become. In this, the suddenly topical fourth installment of the series, I will argue that the situation here is now worse than in the United States, which is widely considered the bastion of “leaving thing up to market,” social Darwinist ideology.

First, let us begin with the headline figure. The US spent 17% of all the goods and services it produced in 2007 on government-provided social services. Israel spent just 15.5% on those services. Among OECD members, this puts it seventh from the bottom, squarely beating such countries as Chile, Mexico and Turkey.

Admittedly, this is largely a reflection of much higher spending on healthcare by the US, which does not necessarily lead to better results, and actually includes less coverage than Israel’s universal system. But the overall impression of an immensely weak social safety net, even in comparison to a country with a much worse reputation on this front, is borne out when we look beyond headline figures, into specific elements of the social safety net.

What happens when you’re old? In the United States, the average social security check comes to 1,177$. In Israel, it is a flat 400$ [Heb], which is nowhere near the equivalent in terms of cost of living or average earnings. Medicare actually provides excellent healthcare for all Americans over 65. Israel’s elderly are covered just like everybody else, which means…

What happens when you’re sick? This is where Israel is supposed to come out ahead. And right now, it does. Here, everyone is covered, whereas tens of millions of Americans are uninsured. However, once the provisions of Affordable Care Act (ACA) fully kick in, in 2014 – assuming the law is not thrown out by the Supreme Court – the US will arguably have a better safety net, even in healthcare. Certainly, the countries will be going in completely opposite directions, as Israel’s deductibles and co-payments soar.

What happens when you’re unemployed? Republicans are opposed to President Obama’s proposal to extend the duration of unemployment benefits beyond the current limit of 99 weeks. Israelis should be so lucky – the most they will get is 25 weeks [Heb].

Yes, Israel is still less unequal than the United States, but this is one gap that we are closing fast. No wonder people are rising up in protest.

Read more in this series:

<< Previous
Israel policy myth #3: Israel is flooded by work migrants
Coming Next
Israeli policy myth #5: Israeli Arabs receive fewer benefits because they don’t serve in IDF

All previous posts in Top 10 Israeli Policy Myths:

Introducing: Top ten myths about Israeli policy
Myth #1: Security is our first concern
Myth #2: Separation between Jews and Arabs is not racist

Myth #3: Trying to stem a flood of migrants

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    1. ARTH

      The author didn’t bother to explain why Israel’s universal health insurance is inferior to Medicare. He also failed to explain what the Affordable Health Card Act would provide superior health insurance coverage to that of the Israeli system. He just infers…
      As far as unemployment compensation is concerned. The “normal” period-of-coverage in the USA is 25 weeks, which is exactly the same as in Israel. It is longer now because Congress extended the period-of-coverage because of the mass employment and the recession. Finally, he failed to mention that unemployment compensation in the USA is capped at $300.00 per week and is taxed as taxable income. Therefore leaving the typical beneficiary with a mere $230.00. How much can an Israeli citizen receive in unemployment compensation per week? Is it comparable to the USA or is it more?
      Certainly, I would be interested in the author addressing these questions if he is so inclined.

      Reply to Comment
    2. Lisa B


      Fact check – unemployment compensation in the US is not capped at $300 a week. Each state sets its own cap. NJ comes in at $600, MA at $500+. Secondly, while taxed, it isn’t at the rate you are inferring. Someone in NJ will have around $20 deducted per check, coming in at $580.

      Reply to Comment
    3. ARTH

      No, it is taxed as earned income. Perhaps not resulting exactly $230.00 out of a payment of $300.00 but more or less. I remember this well from when I collected unemployment.
      The real question, and this is the real interest here, is how much Israeli unemployment is per week.

      Reply to Comment
    4. Noam

      Not to kill a dead horse here, but I can tell you for certain that my unemployment checks here in California are taxable at 10%, and I can opt to defer payment of those taxes until filing time.

      Reply to Comment