Israel and the US have the highest poverty rates among OECD countries, according to this year’s Society at a Glance.
In both cases the problem appears to center around the lack of government intervention.
In the US “the system of social benefits is not very effective at fighting poverty amongst youth,” the report says. “Only 12 per cent of youth who would be poor before any transfers are lifted out of poverty by these transfers compared to 41 per cent across the OECD.” The US has the highest youth poverty rate in the developed world with one quarter of young people living in poverty, compared to 14 per cent across the OECD.
Israel’s poverty problem also lies in the country’s system of allowances. According to the Bank of Israel’s annual report the tax system is “highly progressive” and compared to developed countries, Israel collects a fair amount of taxes from the rich.
As Haaretz reported earlier this year, “since allowances are stingy in Israel, this creates a situation where the government’s influence when it comes to curtailing poverty is 30 per cent – as compared to 60 per cent in other developed countries. In other words, Israel’s assistance to its poor is half that of the OECD countries.”
In general, the OECD found that young people have replaced the elderly as the group most at risk across the developed world. Although the generally poverty rate across the developed world is 11 per cent, for young people (under 30s) it is almost 14 per cent.