Wednesday, December 24, 2014

Facts and misinformation - Boaz Arad



by Boaz Arad


The "problem," especially for those touting these statistics in a disproportionate manner, is that the situation is different, and poverty -- objectively measured by nutrition levels, consumption of goods and services, the quality of education, health care, etc. -- has, in fact, decreased.

There is never a perfect time to release a national poverty report, but we still find ourselves subjected to a series of reports based on questionable data, unreliable individuals, misleading headlines, and populist campaigns, all of which are trying to convince the public that Israel is on the verge of plunging into an economic abyss.

The "problem," especially for those touting these statistics in a disproportionate manner, is that the situation is different, and poverty -- objectively measured by nutrition levels, consumption of goods and services, the quality of education, health care, etc. -- has, in fact, decreased. Paradoxically, misinformation on this issue harms primarily those who truly suffer from poverty.

Ahead of Passover this past year, the State Comptroller's Office released a grave report, based on a phone survey conducted by the National Insurance Institute, which found that the number of people going hungry in Israel was on the rise, and that the middle class was on the verge of collapse. A report by the Taub Center for Israel Studies, based on Central Bureau of Statistics data from 2011, echoed the findings; and perhaps the most manipulative report, based on subjective sentiments expressed by those polled and only a few solid facts, was released Monday by the nongovernmental organization Latet.

The 2011 CBS report clearly indicated that the average family's income was lower than its expenses. The reason for that was simple and rooted in a methodological error -- people rarely reveal their true income to pollsters, and they usually state it is lower than it actually is. This is especially true for the lower socio-economic echelons, where people often earn money off the books. Data collected on income is harder to substantiate than data on expenses, which can be more easily discerned. 

This is the hollow foundation on which various research centers and interested parties base statements suggesting the public's economic situation is deteriorating. Since 2011, the CBS has been correcting its faulty data, but that has not stopped various groups from using it as the basis for their reports.

A recent report by the Jerusalem Institute for Market Studies, a body which rarely receives any media coverage, found that in terms of actual quality of life, the poor's situation has been gradually improving. Between 2002 and 2008 the real disposable income per capita in the lowest socio-economic decile has increased by 8.2 percent, and home ownership rates have increased by 12.5 percent. Since the 1970s, Israel has experienced a gradual increase in real wages, which represent the average Israeli's purchasing power, which in turn sets the cost of living, and the situation has only been improving.

The embellished reports and gaudy headlines, which are trying to convince the public things are getting worse, do little to help those who are truly in need. On the contrary -- the constant demand for state interference, via budget appropriations and raising taxes, for the sole purpose of being "more social," only impedes the efforts made by those trying to better their own situation and exit the cycle of poverty.

The situation in Israel has improved over the past few decades, and it could improve further if we free the market from the levies impeding imports, from unions whose demands raise the prices of goods and services, and from regulatory measures and redundant bureaucracy that contribute to the high cost of living and impeded business development.

We would be able to truly help the poor only when we free the market from these obstacles and study reality for what it is -- not through a distorting lens that seeks to serve foreign interests.


Boaz Arad is the director of the Ayn Rand Center Israel and co-founder of the Israeli Freedom Movement.

Source: http://www.israelhayom.com/site/newsletter_opinion.php?id=11011

Copyright - Original materials copyright (c) by the authors.

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