Working harder, paying more, and getting less

In Israel, we talk endlessly about cost of living. And endlessly about poverty. But almost never in the same sentence.

These are treated as two separate issues: one for economic journalists, another for social-affairs reporters. Convenient, perhaps — but fundamentally wrong.

As if the price of milk had nothing to do with the number of children skipping meals. As if the supermarket were not a political arena. As if poverty floated above prices, disconnected from what families can actually put into their shopping carts.

Yet Israel holds a troubling record: the highest distortion between prices and purchasing power in the developed world — 35 percent. Food prices are 40% higher than the OECD average, and Israeli households spend 18% of their income on food, compared with 13% in the OECD.

We talk about “poverty,” with depressing reports that inspire charity. We talk about “cost of living,” with endless price comparisons. But we almost never connect the two, even though food is the basis of dignity.

The basic basket already exists, but no one uses it

In 2018, the Ministry of Economy and the Central Bureau of Statistics created a basket of 68 essential products, including 58 food items, designed to monitor prices and allow comparisons. It was a serious tool — and then it was largely abandoned.

The basket includes: 23 pantry items, 10 fruits and vegetables, 7 meat and fish products, 9 dairy items and eggs, and 4 types of bread.

From this list, I selected 10 basic products: bread, milk, eggs, pasta, rice, cornflakes, canned tuna, chicken, Coca-Cola Zero, and olive oil. Nothing exotic. Evidently not a full cart — just a basic sample of what an average family buys regularly.

I then looked for the lowest non-promotional price in Israel (excluding sectoral chains). For Europe, I used the lowest prices at Auchan and Spar in France, Austria, and Portugal — the same reference countries used in the Kaspenu app (full disclosure: I created it) because their average prices match the average of Europe as a whole.

Then I asked a simple question: How long must someone earning the minimum wage work to buy these 10 items?

Instinct tells us something is wrong — but numbers tell the story far more clearly.

A reminder: the minimum hourly wage is 34.32 NIS in Israel (≈ €9.11), €11.88 in France, about €11 in Austria, and €5.83 (!) in Portugal.

Work more, buy less: the numbers are brutal

To know whether a country is expensive, shelf prices are not enough. What really matters is how long one must work to buy a product. That is purchasing power: how many minutes of your life evaporate every time you buy milk, pasta, rice, or eggs.

The more minutes required, the harder everyday life becomes, and the more dignity is eroded. Here is what the comparison shows:

Israel: 5 hours 36 minutes of work — more than half a day of labor — just to buy 10 ultra-basic products. Not a full cart, not a week of groceries — only 10 items, and at the lowest possible price.

In the other countries studied, the time required is significantly lower: in France, 3:09 hours; in Austria, 3:43 hours; and in Portugal, 5:28 hours.

And if we consider only France and Austria — two countries whose standard of living and wages are comparable to Israel’s — the average drops to 3:26 hours.

In other words: as compared to those who work in these other countries, Israelis work nearly two extra hours — about 60% more time — to buy the exact same products.

Why the Portuguese example matters

Portugal’s minimum wage is almost half of Israel’s. And yet, a Portuguese worker needs slightly less time than an Israeli to buy the same products. This is crucial to understand: a country with a very low minimum wage should logically have weak purchasing power, and therefore need more work time for food.

A rich country like Israel should logically allow easier access to basic food.

But the opposite happens. This is the very definition of the distortion between prices and purchasing power that Israelis experience daily.

Three telling examples

1. Milk — local, protected, over-regulated… and overpriced
Israeli milk is 100% local, backed by quotas and strict regulation. In theory, it should be cheaper. In practice: 13 minutes of work per liter, vs. 5 minutes in France or 5 minutes in Austria.

That means that Israelis work three times longer than workers in these other countries to subsidize a local, protected, over-regulated product.

2. Olive oil — local, protected, subsidized… yet nearly a luxury

Olive oil is emblematic of Israel and largely locally produced. But the symbol comes at a price: 1 hour and 10 minutes of work in Israel, vs 39 minutes in France, 53 minutes in Portugal, and 53 minutes in Austria (a country that imports 100% of its olive oil).

In a producing country with a protected market, buying a bottle of olive oil demands almost double the work time compared to France.

3. Pasta — universal, importable, standardized

Pasta is one of the simplest products to compare globally. Yet Israelis must work 18 minutes for one kilogram, vs. working 7 minutes in France and 7 minutes in Austria for the same items. That means 2.5 times more work for a universally identical product.

What these examples actually reveal

When the product is local and protected, Israelis pay more — they finance the rents of local producers. When the product is globalized, Israelis pay more — they finance excessive margins of importers. When the product is basic, Israelis still pay more — because in Israel, no product is ever “simple.”

The problem is not the products. Nor the families struggling daily. Nor even the minimum wage, which is reasonable for a developed country with Israel’s GDP.

The problem is the price structure. The margins. A closed market extracting profits from the middle class and the working poor.

Israelis do not lack income. The prices are disproportionate.

A country cannot boast being rich, innovative, productive, with high GDP and record employment, and simultaneously require its workers to devote 5:36 hours of labor to 10 basic food items.

My proposal: a national basket of 58 essential food items at fair prices

Israel already has the perfect tool: the official basket of 58 essential food products, created by the government itself. It is universal, representative, unbiased. It needs only a political decision to make it fair.

1. Price = production cost + capped margin (8–12%)

Producers and distributors report their costs transparently to the state comptroller. The state sets a reasonable maximum price.

2. Apply a reduced VAT of 3% to these essential goods

Many countries already apply reduced VAT to basic necessities. Israel should do the same.

3. Mandatory transparency in stores

Every chain must display the national maximum price, its actual price, and a “Compliant/ Non-compliant” label.

4. Quarterly updates

Prices are revised every three months based on real costs.

5. Independent public commission

Including the state comptroller, economists, NGOs, and consumer representatives.

This reform uses an existing tool, costs the state nothing, protects households, restores transparency, and, finally, establishes a label of food dignity.

When a rich country requires 5:36 hours of labor for 10 basic items, the issue stops being technical. It becomes moral.

Food prices in Israel have become a theft of dignity.

It is time to give it back.