Report: Salary gaps continue to grow
Adva Center report warns of growing inequality in division of national income with top percentile taking home 14.1% of national income
A report issued by the Adva Center for Equality and Social Justice suggests that income gaps in Israel have further increased in the past year.
The report points to two positive trends in 2011: an ongoing drop in unemployment rates - from 6.6% in 2010 to 5.6% in 2011 and a forecast of 5.8% in 2011; and the creation of 80,000 new jobs.
However, the share of employees in the national income stood at 63% and the share of employers stood at 13%. While there has been no significant change in these figures in the past year, a major change has been observed in comparison to the previous decade: in 2001, employees' share was 69% and the employers' share was 8%-9%.
Each percent represents billions of shekels. In 2011, Israel's national income amounted to NIS 735 billion, one per cent of which was NIS 7.35 billion. In the past five years, employees received the combined total of an additional NIS 34.41 billion.
If we divide this sum by the total number of employees in 2011, approximately 3.204 million (excluding migrant workers from abroad) – we find that in 2011 each employee would have received an additional NIS 13,763 per annum, or NIS 1,147 per month.
According to the report, the employees' share in the national income has been dropping steadily in the past two decades.
"The picture that emerges from these figures does not bode well for Israeli society and economy. It reflects a constant weakening of the employee's bargaining power. The profit earned by employers could represent a future loss for Israeli society and economy as employees who are having trouble sustaining a reasonable standard of living and providing their children with proper education and training will not be able to serve as a strong enough foundation for long term economic development," the report's authors Dr. Shlomo Svirsky and Etty Connor-Attias said.
Growing gaps
The report also compared two groups of employees: low-paid workers and highly-paid workers (1% of all employees). According to the report, the salary of low-paid employees only marginally increased between 2003 and 2010, rising by NIS 132 (from NIS 4.026 to NIS 4,158) – a mere 3.3% increase. The salary of highly-paid employees in contrast rose by 9% during this period from NIS 36,488 in 2003 to NIS 39,767 in 2010.
The report also found that the highly-paid employees' share of the national income rose from 12.7% in 2000 to 14.1% in 2010.
In terms of gender equality, the data showed that in 2010 more than one third of women – 34.9% - were low-paid employees, compared to 16.8% of men.
Also, a quarter of Jews and almost one third of Arabs (29.8%) constituted low-paid employees, while 1.1% of Jews were highly-paid employees, compared to only 0.1% of Arabs.
The report also suggested that despite the drop in unemployment, the condition of the unemployed has worsened in the past year. "Unemployment benefits have been eroding in the past two decades," the report said.
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