After nearly three years of war, Israel remains in a state of ongoing emergency rather than returning to routine. Even during periods when the intensity of fighting eases, security uncertainty, evacuation, repeated rounds of reserve-duty call-ups, and the absence of a political horizon continue to shape civilian life and budgetary priorities. Alongside this, a civil struggle over the boundaries of democracy is underway. Within this reality, the socioeconomic question is pushed to the margins — precisely at a time when the need for strong public services and broad economic security has become more urgent.

Even before the war, per-capita civilian spending in Israel was low compared with that of other developed countries; that is, public services operate under a persistent shortage of resources and personnel. Since the outbreak of the war with Hamas, public spending has expanded, but most of the increase was directed to emergency response, evacuation, compensation, and initial rehabilitation — not to strengthening broad, universal, and stable public services. In other words, even as the public budget grew, it did not strengthen the civilian base but served largely as a response to the state of emergency. The social price of the war is therefore not measured only in defense spending or war damage, but also in the gap between society’s needs and the ability of weakened civilian systems to provide an adequate response in the fields of housing, education, welfare, and health.

It is not only the war economy and the needs of security, emergency response, and initial rehabilitation that push civilian services down the budgetary priority list. Compounding this is a government that repeatedly chooses to make across-the-board cuts to these services, while at the same time budgeting for sectoral and contested goals: benefits for the ultra-Orthodox sector and the allocation of significant budgets to expanding the settlement enterprise, alongside across-the-board cuts to the budgets of government ministries generally and especially deep cuts to budgets earmarked for Arab society. This is a  policy resting on short-term coalition considerations, and its result is an ongoing erosion of the principle of universality of the welfare state.

Within this reality, the struggle against inequality cannot be postponed to the day after the war. The data presented in this report show that households entered this period from very different starting points: some rely on stable income, home ownership, savings, and capital income; others depend mainly on monthly wages, contend with a high cost of living and heavy rent costs, live in or near poverty, or were hurt by evacuation, reserve-duty call-ups, or damage to employment or a small business. These gaps also reflect differences between population groups and regions. Thus, Arab society in Israel, which suffers from persistent gaps in income, investment, infrastructure, and local development, is now also exposed to a public climate of hostility and suspicion that makes it harder to advance a policy of civic equality. In such a situation, inequality is not merely background data — it is one of the factors shaping the depth of the harm of war and the ability to recover from it.

Gaps in starting points are not only about current income from work. In times of crisis, home ownership, savings, and capital income serve as an economic safety net, while households that depend mainly on monthly wages are more exposed to loss of income, the growing cost of living, and unexpected expenses. Israel’s inequality is therefore not limited to wage gaps — it is also tied to the concentration of assets and capital income. This concentration is especially pronounced at the top of the income distribution: according to State Revenue Administration data, 82% of capital income is held by the top income decile, and 58% of it by the top income percentile alone. At this end of the distribution, capital is not merely an additional income source but a central mechanism for accumulating economic power.

This report seeks to return to the center of public discourse a question that has been pushed to the margins: how can a society cope with an ongoing crisis and recover from it without deepening the gaps within it? The data presented in the report indicate that an emergency response is not enough. Israel’s ability to cope also depends on its civilian base: on stable public services, broad economic security, and a policy that does not leave most of the burden on households. This is not a question that can be postponed to the day after the hostilities — it is a question that requires an answer here and now.