Financial welfare and stability in haredi society: poor, but managing to save
An article written by the deputy chair of the Haredi Institute for Public Affairs, Nitsa (Kaliner) Kasir and institute fellow Dr. Dmitri Romanov presents the rates of savers in haredi society, with a comparison to other sectors.
The article reveals that the rate of savers in haredi society in 2011-2016 rose from about 20 percent to about 32 percent (an increase of over 50 percent), at a time when the figures for savers in non-haredi society rose at a more moderate rate from about 31 percent to 38 percent, and in Arab society from about 14 percent to about 16 percent. Alongside these figures, during those years there was a decline in the rate of families in haredi society who had difficulty covering their monthly expenses (had debts or used savings to cover debts), from about 37 percent in 2011 to about 30 percent in 2016. Among non-haredi Jews there was a decline from about 31 percent to about 24 percent, and among Arabs the figure rose from about 36 percent to about 41 percent. The highest increase in the rate of savers and the decline in the rate of those who were in debt were recorded even though the poverty figures remained high.
Haredi society is one of the sectors ostensibly mired in economic distress, as reflected in the annual report on poverty and social gaps, authored and published by the National Insurance Institute based on data from the Central Bureau of Statistics. The report presents a dismal picture, according to which about half of all households in the haredi sector are below the poverty line, but data from the 2016 Central Bureau of Statistics consumer trust survey indicate that despite the high poverty rates, many haredim manage their finances responsibly and adjust their expenses to their income.
Kasir and Romanov note that an aggregate perspective of the gap between income and expenses can provide an indirect answer to the question, “Who is poor?” because if a household manages to maintain a balanced budget and even save some of its income, it cannot be mired in economic distress, despite its low income. The gap between low income and the ability to save each month is affected by unique factors that alleviate the economic distress of needy households in the haredi sector, including: the value of making do with little and choosing a life of austerity, donated necessities and the provision of social services via mutual assistance, a low-cost basket of consumer goods that includes designated low-cost brands, and various discounts to low income earners.