Imagine this: the very people driving Israel's economic growth are the ones most likely to fall into poverty. A shocking new report reveals that over a quarter of self-employed families in Israel are living below the poverty line, painting a picture far removed from the entrepreneurial dream. But here's where it gets even more concerning: child poverty rates among these families are a staggering 10.5% higher than those of families with salaried workers.
This eye-opening study, conducted by Dr. Robbie Nathanson for the Histadrut's Self-Employed Forum, exposes a harsh reality. It shows a direct link between reliance on self-employment and the risk of poverty. The more a household depends on self-employment income, the greater the chance of financial hardship.
Let's break it down. In 2024, a staggering 26.6% of households headed by self-employed individuals were living in poverty, a 0.9% increase from the previous year. This is significantly higher than the 22.9% poverty rate for households with salaried employees.
And this is the part most people miss: even when self-employed individuals are the primary breadwinners, their families face a 5-6% higher risk of poverty compared to households where the main earner is a salaried worker.
While there's a slight improvement in the depth and severity of poverty among self-employed households, the overall poverty levels remain alarmingly high. The most distressing statistic? Child poverty among self-employed families stands at 34.1%, a stark contrast to the 23.6% rate for children in salaried households.
Government aid, it seems, isn't doing enough. Transfer payments and grants only reduce poverty by around 30% for self-employed families, compared to a 36% reduction for salaried workers. This raises serious questions about the effectiveness of the social safety net for this vulnerable group.
Is the system failing those who take the risk of self-employment?
The report highlights that those most affected are often owners of very small businesses or freelancers, concentrated in sectors like hospitality, arts, and education – industries known for their economic volatility.
Rami Beja, chair of the Histadrut’s Self-Employed Forum, didn't mince words in his response: “This report confronts us with a bleak and painful reality that cannot be ignored. It's a disgrace that those who fuel economic growth face the highest risk of poverty. After the challenges of COVID and the ongoing war, Israel’s self-employed feel invisible. The safety net promised by the state is either non-existent or woefully inadequate.”
Beja issued a strong call to action: “The Israeli government must change course. Austerity measures and frozen rights are crushing small businesses. The upcoming state budget must prioritize the self-employed sector. Rehabilitation of this sector is a national imperative. Without a strong self-employed workforce, there is no Israeli economy. We demand the security we deserve – as a right, not a favor.”
Do you think the government is doing enough to support self-employed workers? What changes would you like to see implemented?
