Jerusalem Urban Development - Economic Characteristics

C. Jerusalem's Population: Economic Characteristics

The population of Jerusalem suffers from a relatively low economic status. Most residents are employed in public and community services; as wage earners their average income is well below the national average or the average for either Tel Aviv and Haifa, while the poverty level and population density are significantly higher. In effect, because of its social, demographic, and employment characteristics, Jerusalem, Israel's capital and largest city, is also one of the country's poorest cities.

Strengthening the economic basis of Jerusalem is a major objective of the Municipal Council. Tremendous efforts have been made to expand high-tech industry and tourism, and to train professionals in a wide variety of fields that would allow them to increase their levels of income.

C1. The Labor Force

In 1995 Jerusalem's civilian labor force numbered 183.0 thousand persons (48.1%) out of 384.0 thousand persons aged 15+ (the civilian labor force is defined by the CBS as those individuals, aged 15+, who are either "employed" or "not employed" regularly, based on specific criteria). In contrast, the civilian labor force in Tel Aviv is 58.0% of the population aged 15+ and in Haifa it is 52.4%.

The relatively low percentage of Jerusalem residents in the civilian labor force is a direct result of the social composition of the population and the low percentage of woman in the workforce (39.8% in Jerusalem, vs. 50.1% in Tel Aviv and 46.6% in Haifa). Among those belonging to the civilian labor force, 181.8 thousand (93.5%) are employed and 11.0 thousand (5.5%) are unemployed. The percentage of the population in the civilian labor force is highest among the 25-54 age group, but it is nevertheless lower than the same age group in either Tel-Aviv or Haifa because of the aforementioned factors.

Table 4: Percentage of the Civilian Labor Force by Age Group
Out of the Total Population in Jerusalem, Tel Aviv, and Haifa, 1995

Age Group	Jerusalem	Tel Aviv	Haifa
15-17	9.8%	15.3%	14.0%
18-24	37.9	57.6	39.9
25-34	61.8	81.7	79.0
35-44	69.1	79.7	81.4
45-54	68.2	81.2	85.8
55-59	61.4	63.5	62.8
60-64	42.0	43.2	35.3
65-69	20.2	25.9	19.4
70+	8.0	11.3	4.4
Source: Statistical Abstract Israel, 1996, Central Bureau of Statistics, Table 12.2.

C2. Employment

In 1995 there were 194,500 employed persons in Jerusalem, as compared to 328,600 in Tel Aviv and 157,800 in Haifa. It is also possible to contrast the number of people employed in these cities with the number of employed living in the city. In Jerusalem the number of employed persons is larger than the number of employed living in the city by 12%, in Tel Aviv it is larger by 107%, and in Haifa it is larger by 61%. This indicates that while Tel Aviv and Haifa are both metropolitan employment centers, Jerusalem serves mainly as an employment center for its own residents.

Table 5: Scope of Employment and Employed Residents
in Jerusalem, Tel Aviv, and Haifa, 1995 (in Thousands)

	Jerusalem	Tel Aviv	Haifa
Total Number of Employed	194.5	328.6	157.8
Employed Living in the City	173.0	158.6	98.2
Percentage of Total	88.9%	48.3%	62.2%
Source: Statistical Abstract of Israel, 1996, Central Bureau of Statistics, Table 12.10

The structure of employment in Jerusalem can be characterized by a high percentage of people employed in public, community, personal and other services, and a relatively low percentage of people employed in manufacturing, banking, insurance and business activities (in contrast to Tel Aviv-Jaffa), trade, and in accommodation services and restaurants. The high percentage of people employed in public, community and personal services (including public administration, education, health, welfare and social work services) stems from Jerusalem being the capital of the State of Israel, and therefore home to most government offices, the Hebrew University, and the Jerusalem Municipality: since Jerusalem is Israel's largest city, the municipality is, correspondingly, the largest in the country. The existing structure of employment has implications on the possibility of providing varied employment opportunities, the level of income earned, and, accordingly, the possibility of purchasing goods and services.

The following table presents the employment breakdown of the workforce in Jerusalem in 1995 in comparison to that of the State of Israel, Tel Aviv-Jaffa, and Haifa. This data indicates the following major findings: some 47 percent of the workforce in Jerusalem is employed in public, community, personal and other services, as opposed to approximately 25 percent in Tel Aviv-Jaffa and about 29 percent in Haifa; some 13 percent of the workforce in Jerusalem is employed in public administration, as compared to approximately 5 percent each in Tel Aviv-Jaffa and Haifa; some 15 percent of the workforce in Jerusalem is employed in education, as compared to approximately 6 percent in Tel Aviv-Jaffa and about 10 percent in Haifa; some 11 percent of the workforce in Jerusalem is employed in health, welfare and social work services, as compared to some 6 percent only in Tel Aviv-Jaffa and about 10 percent in Haifa.

The percentage of the Jerusalem workforce employed in manufacturing is only about 11 percent, as compared to 16 percent in Tel Aviv-Jaffa and 15 percent in Haifa. The percentage of the workforce in Jerusalem employed in banking, insurance and business activities comes to about 13 percent in Jerusalem as compared to some 24 percent in Tel Aviv-Haifa and 25 percent in Haifa.

In light of the current structure of employment in Jerusalem, the municipality determined to improve the city's economic basis by varying employment opportunities and encouraging those professions where incomes are higher (high-tech industry, business, etc.). It is believed that this will strengthen the city socially and demographically and curb the movement of the younger population to Tel Aviv and other urban centers in search of work.

Table 6: Employed Persons in Israel, Jerusalem, Tel Aviv, and Haifa by Economic Branches, 1995

Economic Branch	Percentage of Employed
	Israel	Jerusalem	Tel-Aviv	Haifa
Total	100.0	100.0	100.0	100.0
Agriculture	2.9	0.6	0.1	0.3
Manufacturing	21.0	11.1	15.6	15.3
Electricity and Water Supply	1.0	0.3	1.4	1.2
Construction	7.2	7.1	5.2	5.2
Trade, Accommodation services and Restaurants	16.8	15.6	19.0	20.3
Transport, Storage and Communication	5.8	5.0	7.0	7.1
Banking,lnsurance and Business Activities	12.4	12.5	23.6	24.8
Public, Community, Personal, and Other Services Thereof:	32.6	46.9	24.6	29.4
Public Administration	5.5	12.5	4.9	5.0
Education	12.0	15.2	6.4	9.7
Health, Welfare and Social Work Services	8.8	11.0	5.6	9.6
Community, Social, and Personal Services	4.7	7.0	6.3	3.3
Private Households with Domestic Personnel	1.6	1.2	1.4	1.8
Not Known	0.3	0.9	1.2	0.3
Source: Adapted from The Statistical Yearbook of Israel, 1996, The Central Bureau of Statistics, Table 12.10. Note: This table represents the new breakdown of economic categories established by the Central Bureau of Statistics. Since the last breakdown was announced in the 1970s, there have been changes in the structure of the Israeli market, technological developments, and new economic activities that led to changes in the ranking of activities in terms of importance and which required the recategorization of the branches of the econoiny.(The Central Bureau of Statistics, The Uniform Categorization of Economic Categories, 1993). In 1993 changes were made in the categorization of economic branches. The main changes were: Banking, Insurance and Business Activities were broken down into a larger number of main branches. Public, Community, and Personal Services were split into Public Administration, Education, Health, Welfare and Social Work Services, Public, Community, and Personal Services, and Private Households with Domestic Personnel.

C3. Level of Income

On 30 November 1994 there were 150,638 wage earners in Jerusalem, 152,716 in Tel Aviv, and 101,400 in Haifa (the National Insurance Institute). This means that most people employed in Jerusalem are hired workers. In 1994 the average wage per month of a Jerusalem worker was NIS 4,200. In contrast, the average wage for workers in Tel Aviv was NIS 4,877 (16.1% higher) and in Haifa, NIS 5,149 (23% higher). The average monthly wage nationwide in 1994 was NIS 4,274.

In November 1995 there were about 61,000 wage-earning families in Jerusalem. The average monthly salary for wage-earning families in Jerusalem was NIS 6,252 (1994), which is significantly lower that of Tel Aviv (NIS 7,563) and Haifa (NIS 8,282). The average monthly salary for wage-earning families in Jerusalem is similar to the national average. The average monthly salary of wage earning families in Tel Aviv is higher than that of Jerusalem's by 16% and in Haifa the average monthly salary is higher by 23%. In addition, 38.8 percent of wage-earners in Jerusalem aern up to the minimum wage, as compared to 37.9 percent in Tel Aviv and 36.5 percent in Haifa.

Similarly, the average monthly income of independent business people in Jerusalem (NIS 3,471) is lower than that of Tel Aviv (NIS 4,760, or 37% higher) and Haifa (NIS 4,419, or 27% higher). Finally, the percentage of the population receiving old-age benefits and income supplements reached 29.5% in Jerusalem in 1994, as compared to 24.1% in Tel Aviv and 25.2% in Haifa (Statistical Yearbook of Jerusalem, 1994, Table F/8).

Table 7: Average Monthly Salary of Wage Earning Families in
Jerusalem, Tel Aviv, and Haifa, 1994

Community	Average Monthly Salary of Wage Earners (NIS)
	Workers	Wage Earning Families	Independent
National Average	4,274	6,440	4,055
Jerusalem	4,200	6,252	3,471
Tel Aviv	4,877	7,563	4,760
Haifa	5,149	8,282	4,419

Source: The National Insurance Institute, unpublished

C4. Poverty

There is more poverty in Jerusalem than in either Tel Aviv or Haifa, and more individuals, especially children, are affected by it. In 1995 up to 20% of Jerusalem families lived below the poverty level - they numbered 25% of the city's total population and included 37% of the city's children. In comparison, 17% of all Israelis and 23% of all children live below the poverty line. In Tel Aviv the statistics are 13% and 27% respectively, and in Haifa, 13% and 16%.

In 1995 there was a rise in the percentage of poor individuals, and children, living under the poverty line in Jerusalem. This rise should be of considerable concern, particularly upon considering an opposite trend in Tel Aviv and Haifa, where there was a significant drop in the percentage of children living under the poverty line: In Tel Aviv it dropped from 25.4 percent in 1994 to 16.8 percent in 1995, and in Haifa it dropped from 22 percent in 1994 to 16.3 percent in 1995.

The high incidence of poverty in Jerusalem can be attributed to the social and demographic composition of the city and the generally low level of income. As mentioned earlier, large families are characteristic of Jerusalem's ultra-Orthodox and the non-Jewish populations. So, too, is a low income level.

Table 8: Level of Poverty, 1994, 1995

Community	Level of Poverty (percentage)
	Families		Individuals		Children
	1994	1995	1994	1995	1994	1995
National Total	18.0	16.8	18.0	17.8	22.8	23.2
Jerusalem	20.3	18.5	24.7	24.8	33.9	37.0
Tel Aviv	16.8	13.8	17.7	13.4	25.3	16.8
Haifa	17.7	12.0	16.6	12.8	22.0	16.3

Source: 1994 - Annual Survey, 1994-1995, The National Insurance Institute (December 1995) 1995 - The National Insurance Institute, unpublished

According to the Municipality's Department of Welfare Services, the past few years have seen a rise in the number of families being helped by the welfare services. Whereas in January 1993 the department serviced 29 thousand families, it serviced 33 thousands families in January 1994 - an increase of 14%.

In 1995 the number of people treated by the Department of Welfare Services rose by 17 percent. This rise can be explained, in part, by the difficulty residents have in meeting their basic needs and in part by an increase in the severity of certain social phenomena (e.g. children at risk and domestic violence). About 24 percent of all Jerusalem residents receive assistance from the Department. In order to increase the number of employed persons and to raise the level of income, a new unit, the Employment Development Unit, was created in the Municipality's Department of Welfare Services. In 1995, this unit assisted some 1,800 residents; some were placed in jobs and others were directed to professional training courses so that they could raise their level of income.

C5. Motorization

Another indicator of Jerusalem's relatively low economic level is the degree of motorization, or the number of cars in the city. Although there has been an increase in the number of cars over the past few years, the numbers (190.5 per thousand people) are still low when compared to the national average (251.4 per thousand) or Tel Aviv (535.9 per thousand) and Haifa (324.9 per thousand).

Furthermore, there are also many more older cars in Jerusalem than in either Tel Aviv or Haifa. Some 33.2% of Jerusalem's cars were manufactured up to 1984, as compared with 20.3% in Tel Aviv and 23.9% in Haifa. Similarly, the percentage of vehicles manufactured after 1994 is 11.4% in Jerusalem, 19.7% in Tel Aviv, and 13.7% in Haifa.

C6. Residential Density

One of the best indicators economic level is residential density: high density indicates a low economic level and low density indicates a high economic level. In Jerusalem, residential density is relatively high. In 1994, 11.4% of Jerusalem households consisted of two or more persons per room, while in Tel Aviv and Haifa the numbers were 5.9% and 3.9% respectively. The national average is 6.7%.

The situation is particularly pressing among the non-Jewish sector, where the average density is 2.2 persons per room in comparison to an average of 1.1 among the Jewish population. Furthermore, 30% of all non-Jewish households have 3 or more persons per room as compared to only 2% of Jerusalem's Jewish population. In contrast, 8% of non-Jewish households have less than one person per room, as compared to 41% of the Jewish population (54% in Tel Aviv and 55% in Haifa).

Apartment Size: The average area of apartments in Jerusalem is 72 sq. meters. About 39% of all apartments have less than 60 meters (of them 13% have less than 40 meters). The highest concentrations of small apartments are, in the Jewish sector, in the older, ultra-Orthodox areas and in Nahlaot, Kiryat Menahem, and Ir Gannim, and in the non-Jewish sector, in the Muslim Quarter, the Christian Quarter, the Armenian Quarter, Silwan, and Jebel Mukabbar.

A calculation of residential density by square meters per person shows that:

• 6% of residential units have a density of less than 10 meters per person; 21% of the city's population lives in such conditions.

• 24% of residential units have a density of more than 30 meters per person; 13% of the population lives in these conditions.