In terms of Israel’s socioeconomic reality, May 2025 is marked by the government’s decision to raise the prices of state-regulated dairy products – another step in a relentless series of price hikes over the past two years. From food to property taxes, electricity, fuel, and other basic services, the cost of living in Israel continues to soar.
Some may dismiss the current increase as “just a few cents.” Still, this decision, targeting even products under government price controls, makes one thing clear: The state is willfully eroding its safety nets, and this move may be only the tip of the iceberg. Or, in dairy parlance, the edge of the carton.
Over the past two years, it has often felt as if the government, particularly the Finance Ministry, is focused solely on short-term fiscal gain, ignoring the ever-growing elephant in the room: the long-term social cost. It’s as though actuarial analysis isn’t needed when the victims are the country’s most vulnerable.
This neglect is not only pushing low-income families to the edge, it’s dragging the working middle class down with them, inching them ever closer to the poverty line.
This month’s price increase doesn’t affect luxury goods; it affects staples. These are essential food items that the state itself once deemed so crucial that they were placed under official price control to ensure every household could afford them. Today, not only is the shame gone, but the state itself is fueling the cost-of-living crisis, weakening the very foundation of dignified life in Israel.
But we must not be distracted by the dairy price hike alone. It is not an isolated incident; it’s part of a broader, deliberate, and ongoing policy pattern. We must connect this moment to the larger social and economic landscape of the past two years. The rise in prices is choking families across the country.
There is no time for delay
Each month, we at Pitchon Lev see more and more new faces turning to us for help, with demand for food packages growing steadily.
More concerning are the findings from our recent national survey of the middle class. In the past year, 48% of respondents reported having to borrow money from family or the bank. A staggering 88% said they were forced to cut back on essential expenses – clothing, food, even housing.
These are not families who have already fallen into poverty; they’re just on the brink. And these numbers should be deeply troubling to anyone in a position of power.
A recent step in the right direction was taken with the passing of legislation to establish a National Authority for Combating Poverty, intended to create a comprehensive, state-led response to poverty.
But at this point, it seems that while one hand of government claims to fight poverty, the other is actively creating more of it.
It’s not just dairy. It’s also rising property taxes, electricity bills, gas prices, public transportation costs, and expected increases in childcare and education expenses. All of this is playing out against the backdrop of a traumatic two years in which tens of thousands of families were economically devastated, small businesses shuttered, reservists called away from work, and more citizens in need of holistic support than ever before.
There is no time for delay.
The newly established authority must be launched immediately, with a clear mandate, aggressive timelines, and real power to implement solutions because this isn’t just about historically vulnerable populations anymore. It’s about Israel’s working class – the “new poor.” Who knows what next month will bring?
One thing is certain: Without a fully operational authority empowered to halt the decline and lift families out of poverty, the increase in dairy prices will be just the edge of the carton.
The writer is CEO of Pitchon Lev.
