While a strong economy has enabled Israel to navigate the choppy waters of the global downturn relatively unscathed, the country in recent years has seen a rise in wage disparity between top earners and other workers, according to a new report.
The report, released Sunday by Adva, an NGO that analyzes economic data from an “equality and social justice” perspective, notes that during the current growth period, between the end of the Second Intifada in 2003 and 2010, executives at the top 25 companies traded on the Tel Aviv Stock Exchange saw their salaries increase an average of 161 percent.
In 2011, the average wage of an Israeli worker was NIS 8,741 (some $2,300), and the minimum wage for full-time work was NIS 4,100. In contrast, the CEOs of the 100 largest companies received an average of around NIS 540,000 per month, 62 times the average wage and 132 times the minimum wage.
Still, according to the report, in 2011, the top income brackets saw a drop in earnings averaging 7.4%, with the highest earners recording a 20% drop in income. The reduction, the report notes, is mostly due to stock market declines in 2011 and not a reduction in monthly salaries.
According to Adva, income inequality in Israel is among the greatest of OECD countries, placing it in fifth place out of 27 in this regard. In addition, since the 1980s, income disparity in the country has increased some 13.8%, compared to the 4.3% average among OECD members for the same time period.
The data showed that males of Ashkenazi background earned 33% more than the average monthly salary, and males of Sephardi extraction earned an average 7% more. Women, however, received an average wage of NIS 6,600 — 25% less than the average — and Arab citizens earned 33% below average.
Israel’s GDP per capita increased 1.6% over the last decade (to $31,000 in 2011), a higher growth rate than many industrialized countries such as the US or Germany but significantly below developing economies such as China, India or Brazil.
The middle class, defined as households that earn between 75% and 125% of the median household income, stood at 27.5% of the population in 2011, while in the 1980s 33% were defined as middle class.