A real look at the cost of living

September 8, 2008 by

Good news from the Central Bureau of Statistics – Israelis’ average salary (before taxes) is now NIS 8,210 per month. That’s 1.4 % higher than the first half of 2007.

 

Problem is that prices of basic staple goods are rising at a much faster rate. The CBS also publishes the monthly Consumer Price Index to track retail prices around the country. Turns out that the price of pasta has risen 15.2% since January of this year, fresh beef 11.3% (29.3 % frozen), chicken is up 21% and cooking oil is 20.2% higher than last September. The biggest whopper is rice: 73.9% more expensive this year than last.

Put in dollar form, NIS 8,210 is just over $27,000 a year – just moderately higher than the U.S. poverty line of $22,200 a year for a family of four, and fails to take into account that even secular Israeli families have more than two children on average.

It also pays to consider what taxes do to that NIS 8,210 shekels. Depending on family size, area of residence and several other factors, working women can expect to lose approximately 12% of their gross salaries, to come home with something like NIS 7,200. Their husbands will come out even worse off, bringing home something in the order of NIS 6,000 after taxes.

 

In real terms, even families with two average salaries will fall far short of their monthly expenses. A three-bedroom rental apartment near Jerusalem – outside the city) currently runs approximately NIS 3,500 a month, far more than that the closer one gets to the downtown area. Municipal taxes, known locally as “arnona,” often total NIS 1,000 per month, and if the working parents have a baby to take care of, full-time childcare is at least another NIS 1700. That’s more than NIS 6,000 per month in basic expenses, and we haven’t started to calculate food, home utilities, transportation or other basic necessities.

 

Several months ago, I was privy to a conversation between a veteran immigrant family and a couple on a “pilot trip” to speck out housing and employment opportunities before taking the plunge of moving to Israel. For a family with four teenage kids, the veterans said, expect to spend more than NIS 17,000 a month in food, insurance, education, pocket money and other run-of-the-mill expenses.

 

That amounts to NIS 204,000 per year, or nearly US $57,000. Compare that to the average U.S. salary (2006) 58,029, and the picture becomes clear: The salary needs of average Israelis are far in excess of the average salary that Israeli employers are willing to pay. The impact on food service charities should be obvious.

Israel and the non-profit world

September 1, 2008 by

Miriam Schwab of Illuminea has a great overview of the non-profit sector in Israel. Taking stats from The Marker business magazine (I’d link to it here, but it’s only in Hebrew), she paints an interesting picture of Israelis’ attitudes to charity and to non-profit organizations.

 

Link is here, well worth the read.

 

 

T2T on 21C

August 27, 2008 by

Have a look at this video clip featured on Israel 21C.

McCartney in Israel – for just NIS 10,000

August 26, 2008 by

Tickets go on sale today for Paul McCartney’s September 25 concert in Tel Aviv, but there’s a small catch: Cheap seats are expected to go for about NIS 500, with a price map stretching all the way up to NIS 10,000 for something called a “VIP Pass.” According to the Hebrew-language MSN website, entertainment journalists and music critics will pay full price for the privilege of working the show, which will take place in open-air HaYarkon Park. Ticket revenues are expected to bring producers more than NIS 10 million.

 

Now, call me soft, but poverty statistics (1.6 million Israelis live under the official poverty line) and unemployment numbers (the number of job seekers in Israel has risen in each of the past three months). Food service NGOs say they are buckling under the triple whammy of a poor international economy, which leads to fewer donations, a weak US dollar, which limits the spending power of the donations non-profits do receive, and increased demand caused by the international financial downturn.  And Israelis are expected to shell out thousands of shekels for one concert?

 

One afterthought: Several years ago, McCartney was forced to cancel a concert in Melbourne, Australia after exorbitant ticket prices led to slow ticket sales. McCartney was able to attribute the cancellation to “a mark of respect” to victims of a terrorist attack in Bali two weeks earlier in which 202 people died, including 88 Australians, but even organizers admitted they’d overstepped the realm of possibility and excluded the bulk of McCartney’s fan base from the concert.

 

Could the same happen here?

Israel featured on Wasted Food

August 12, 2008 by

Jonathan Bloom has featured Israel once again on his blog, Wasted Food, this time about water issues and a horrible photo of rotting tomatoes. As usual, Bloom’s thoughts are insightful and the post worth reading.

Practical thoughts on food waste

July 27, 2008 by

Had some more practical thoughts about food waste over the weekend, after reading a couple of stories about it on the. As I think about the issue more and more, perhaps this will be the start of a longer, “practical guide to cutting down home food waste” column that I’ll put together one day, but here are my initial thoughts for the moment.

 

 

Take notes. Whether it’s for weight loss, financial planning or supermarket shopping, studies show that keeping careful tabs on whatever behavior you’re trying to refine is an important key to success. In order to reduce food waste at home, write down what you eat in the course of a week for a couple of weeks. The results are likely to be sobering (“I thought I ate more fruit, and I can’t BELEVE I eat so many potato chips!), and it will help give an idea about what you REALLY need next time you’re at the supermarket.

 

Plan ahead… honestly. Think carefully about what you are likely to consume in the course of a week, and about what you are likely to have time to prepare. Will you really have the time this week (not to mention the inclination) to cook that stir-fry that seems so appealing when all the veggies still on the shelf? With food prices on the rise, eMaxHealth has a good primer on planning low-cost meals that will save money, cut down on waste, and quite possibly slash food preparation time to boot.

 

Take your time. Most people have no desire to go shopping more than once or twice a week, and even that outing is often squeezed into the 45 minutes between dropping the kids at soccer practice and getting to the dentist on time. But when choosing fresh produce, take care to check individual tomatoes, apples, pears and even berries to ensure they are fresh, or even a tad under-ripe. Rotting fruit speeds up the aging process on other fuits in the drawer, as the Boston Globe wrote over the weekend.

 

Storage: The fridge is essential for dairy and meat products, and there’s not much I enjoy more than a cold piece of watermelon on hot summer day. Bust most of the fruit and veggies in my house live on the counter, or in a roll-around plastic cart in the kitchen, in easy reach when I want a light snack or when I’m cooking dinner.  The Grist environmental news wire says the dryness of the fridge cuts down the shelf life of many fruits and vegetables, as does pre-washing to save time later. It’s well worth looking at the full article here.

Water conservation and food production

July 22, 2008 by

 

Israel features prominently in this New York Times story about water issues and the Middle East. Turns out that Israeli farmers lead the world in agricultural production per drop of water, treating sewer water for re-use on farms, desalination and more. The article even says Israel is addressing water issues by cutting down supplies of fresh water to farms.

 

The real kicker? Israeli expertise in water conservation and food production is now a model to be followed for much of the Arab world.  Full article can be read here.

Little change in June prices

July 17, 2008 by

Good news for a change: Overall consumer prices remained close to static in June, with the Consumer Price Index rising just 0.1 percent for the month, far short of the 0.5 percent The strong drop in prices for fresh fruits and vegetables made an important contribution to the overall statistic; if one ignores the price of fresh produce the entire index rose by 0.6 percent over the month of May.  

 

Fresh fruits and vegetables led the index, falling a collective 10.3 percent as summer fruits like grapes, watermelon and apricots came into season, offsetting rises in clothing, gas. Taking fresh produce out of the equation, the CPI would have risen 0.6 percent; tomatoes alone brought the index down by a half-percent. Overall, food prices rose 0.4 percent in June.  

 

Other steep drops in June included:

Product

Percent change

salted cheese

-5.1

fresh chicken

-2.7

frozen goods

-2.2

pasta

-1.8

prepared meals

-1.8

white flour

-1.7

beer

-1.5

fresh grains

-1.3

cocoa

-1.1

 

On the other side, the following products recorded sharp price hikes:  

Product

Percent Change

Frozen chicken

9.1

Margarine

4.7

ice Cream

4.1

Mayonnaise

4.0

red meat

3.4

dairy products

2.4

tehina

2.4

meat products

2.3

salt

2.1

candy

1.7

wine

1.7

rice

1.5

coffee

1.2

meals at work

1.1

In addition, wholesale food prices rose 0.4 percent in June, with only chicken (-3.9 percent), ice cream (-2.4 percent) and mass-production cookies registering price drops over the previous month. Other wholesale goods registered net increases, including red meat (12.9 percent), prepared salads (2.8 percent), margarine (6.7 percent), mayonnaise (3.7 percent), tehina/humus spreads (2.6 ), wheat bran (7.6), pita/bread rolls (5.4), chocolate(1.6), soy oil (3.8), other oils (1.4), frozen goods (1 percent), soup mix (2.4), instant coffee (1.3), tea (8.6) and prepared sauces (1.3). 

 

All of this is not to say that things are completely rosy. Since the beginning of 2008 the CPI has risen 2.3 percent (produce not included), and in the past 12 months the rise has been 4.6 percent. But it always pays to highlight good news when it happens. 

Taking on bioenergy

July 15, 2008 by

Had an interesting conversation last night about food prices, the type of talk that provoked a sarcastic “of all the nerve! Can you imagine all those Chinese who actually want to EAT?!” comments. The topic quickly turned to biofuels that divert food products such as corn away from human consumption in favor of “clean” energy divert.

I’m not sure the conversation yielded much more than hand-wringing and a good bout of “what are we going to do about high food prices?”, but it did get me thinking: What’s the story with biofuels?

Controversy

Both the United States and European Union have shown strong support for biofuel technology in recent years, with the Bush administration calling on US energy companies to produce 36 billion barrels of biofuels each year by 2022 and European pols setting a goal of 10 percent of the continent’s road oil to come from biofuels by 2020. The EU has been under pressure of late to reconsider, in part because of the havoc bioenergy is said to be playing with global food production and supply.

Bush says the push for bioenergy has only pushed food prices up about three percent. So do some Asian and South American (and producers) of biofuels.

Not so, says the World Bank. Bank economists say increased demand from growing middle class countries like India and China had little to do with driving food staples upward in mid-2007.

The Age, published in Melbourne, Australia has a good analysis of the bio-fuels controversy, but my sense about all this is that both Europe and America are caught in a two-fold bind: Both are trying to alter the decades-old reality of being held hostage to OPEC, while at the same time remaining faithful to energy companies that have donated handsomely to election campaigns on both sides of the Pond. After all the effort and money invested in biofuels, it’s a bit difficult to imagine George W. Bush or EU President José Manuel Barroso taking on such major supporters.

All of which leads us back at the beginning of the conversation: Are biofuels responsible for the steep rise in food prices? And if so, is breaking OPEC’s grip on the West important enough to continue developing biofuel technology, despite the impact it has on global food availability?

Don’t cry, my Kinneret

July 8, 2008 by

 

There’s been a lot of talk this summer about the Kinneret, Israel’s largest fresh water source otherwise known as the Sea of Galilee. During the summer, as the country pumps drinking and irrigation water, the lake’s water level is featured every week on the news. Half-a-year later, wintertime rainfall in the north of the country is supposed to refill the lake from November to April.

 

Israel\'s main water source
Looking east over the Kinneret

But the past four years have been relatively dry. Very dry, in fact. At the same time, the cost of electricity and electrical appliances like air conditioners have dropped, meaning goods that were once considered luxury items are now accessible to middle class Israelis. As a result, water usage in Israel has gone steadily up as supply has gone steadily down. This year the Kinneret started the dry season this year far below capacity, and now, the Jerusalem Post reports that irreversible damage to the Kinneret is imminent if Israel and Israelis don’t change our water-consumption habits soon.

Obviously, the country has some tough choices to make. Even without discussing the pros-and-cons of desalination, importing water from Turkey or politics, there are obvious questions to address. Should the country grow water-heavy crops like cotton? Should the country provide discounted, drinking-quality water to kibbutzim to irrigate crops when Grade B water would be sufficient to keep fields irrigated and allow for healthy plant growth?

The effect of a water shortage should be obvious, in Israel more than in other places. A drop in supply is likely to mean further hikes in costs, not in imported goods like rice but in basic, locally produced crops such as cucumbers, tomatoes carrots and more. That is sure to make an already tough situation worse for charities and food service organizations.

But are Israeli authorities and agriculturalists willing to make the tough choices required to deal with the water crisis? Or maybe the reality is even worse: At the end of the day, is there enough water in Israel to support the 7 million inhabitants of this land? And if not, what then?

Any thoughts?

 


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