Fifth of wage earners below poverty line
New study reveals economic growth only benefiting wealthy, reveals worrying discrimination against Mizrahim, women, Arabs
The average Israeli works twelve years before his cumulative pay equals the monthly salary of the CEO of a large firm. The average wage for women is two thirds of that for men while Arabs earn, on average, 30% less than Jews. But those may not be the most alarming figures revealed in a new study conducted by the Adva Institute, researchers also report the number of high school students eligible for matriculation certificates is on a steep decline
The institute, which researches social trends with an emphasis on equality or lack thereof, displays a frightening and gloomy portrait of the situation of Israeli society.
The gaps between Israel's rich and poor are only growing, the institute says, despite the impressive economic growth registered on the national level. "Promises made by politicians, that the growth will seep downward, are not being fulfilled," the researches write.
The socio-economic policy that has guided the Israeli government in recent years has only increased the gaps in Israeli society between rich and poor, say Adva researchers. This is the central claim of the institute's comprehensive study of the social situation in 2007. "Since 2003, Israel has enjoyed an economic growth, but the social gaps are not shrinking," concludes the report.
According to the study, the income gap between the top and bottom deciles in society continues to grow. The average monthly income of the top 10 percentile was over $10,000. The CEO of the average publicly-traded firm earns 49 times the minimum wage and 22 times the average.
The annual wage of a CEO in one of the largest 25 publicly-traded firms is much larger still: in 2006 these CEO's earned an average annual salary of $2.5 million. The incomes of those at management level has seen a dramatic increase in recent years – in 2003, that same CEO earned $1 million.
And what of the wage-earners?
Despite this growth, the majority of Israeli wage earners (over 60%) earned less than $1,450 a month last year. The researchers at the Adva institute calculated that the average Israeli wage-earner would have to work 12 years before accumulating the monthly salary of the average CEO of a big company in Israel. Furthermore, the study shows that 19% of workers were living under the poverty line in 2006.
The researchers explain the expanding gap by pointing to the concentration of growth in the finance and high-tech sectors, at a time when traditional industry experienced almost no growth at all.
The increasing gap between rich and poor manifests itself in a growing gap between different sectors of society, be they based on religion, ethnicity, or gender.
Accordingly, the average salary of an Ashkenazi Jew is 39% above the market average while that of a Mizrahi Jew is only 3% above average. The salary of an Israeli Arab, in contrast, stood at 30% below the national average last year. Arab wages have decreased in recent years compared to the average Jewish wage: in 2003 the average Arab's salary was 75% of the market average.
Unemployment is less than 1% in wealthy Jewish areas such as northern Tel Aviv, but reaches 20% in some Arab communities.
The average wage of an Israeli woman last year constituted 63% of a man's. While most men work more hours than women, accounting for this fact does not eliminate the gap: the average hourly wage of a woman is 84% of that of a man.
And if anyone is under the impression that education will solve these problems in the future and further equality in Israeli society, the study points to a rather disturbing statistic: the years 2004-2006 saw a dramatic fall in the percentage of Israeli secondary education students receiving matriculation certificates. Only 46% of Israeli 17 year-olds matriculated last year, in comparison to 49% in 2004.
"These statistics place a large question mark on the policies of the current Israeli government, which is
entirely focused on economic growth and not on advancing Israeli society and securing education, social security, and health for its citizens," the economists of Adva write.
"This data indicates that Israel requires a policy that will combine growth with social justice. Investment must be spread among all sectors of society and areas of the country and tools which have in recent years been the purview of a small minority must be provided to all citizens."
