A stark reality has been unveiled in Israel, where a significant portion of self-employed families are struggling to make ends meet. The numbers are eye-opening and demand our attention.
A recent report by Histadrut has revealed that the more a family relies on self-employment income, the greater the likelihood of falling into poverty. This is a concerning trend, especially when we consider the impact on children. Among the offspring of self-employed families, the poverty rate is a staggering 10.5% higher than those with salaried employee parents.
But here's where it gets controversial...
The report, conducted by Dr. Robbie Nathanson, paints a grim picture. In 2024, over a quarter (26.6%) of households headed by a self-employed individual lived below the poverty line, a year-on-year increase of 0.9 percentage points. This is significantly higher than the poverty rate among households with salaried employees (22.9%).
The data further highlights a direct correlation between reliance on self-employment income and the risk of poverty. When the self-employed person is the primary earner, the poverty risk is 5-6 percentage points higher compared to households where the self-employed person is not the main breadwinner.
While there has been a slight improvement in indicators measuring the depth and severity of poverty among self-employed households, the overall poverty levels remain alarmingly high. The report emphasizes that child poverty among self-employed households is a particularly pressing issue, with a poverty rate of 34.1%, a significant gap of 10.5 percentage points compared to children in salaried employee households.
And this is the part most people miss...
Government aid, in the form of transfer payments and grants, has been less effective for the self-employed sector, reducing poverty by only about 30%, compared to a reduction of roughly 36% among salaried households. This suggests that the social safety net needs to be reevaluated and strengthened for the self-employed.
Self-employed individuals living below the poverty line are often owners of very small businesses or freelancers, working in sectors with high economic risk, such as hospitality, arts, and education. These individuals feel the brunt of economic challenges and often go unnoticed.
Rami Beja, chair of Histadrut's Self-Employed Forum, responded to these findings, stating, "This report exposes a bleak and painful reality that cannot be ignored. It is a disgrace that those who drive economic growth face the highest risk of poverty. After years of challenges during COVID and an ongoing war, Israel's self-employed feel forgotten.
The state's safety net is either non-existent or inadequate. It's time for the government to change course. We cannot continue with austerity measures while small businesses struggle. The upcoming state budget must prioritize the rehabilitation of the self-employed sector, as it is a national interest. Without a strong self-employed workforce, the Israeli economy will falter. It's time to provide the security and support they deserve as a right, not a favor."
This report raises important questions about the support systems in place for self-employed individuals and the impact on future generations. What are your thoughts on this matter? Do you think enough is being done to support the self-employed sector? Feel free to share your opinions and engage in a discussion in the comments below!
