A new study has found a huge and abiding income gap between Jewish Israelis of Ashkenazi, or European, origins and Mizrahim, or Jews hailing from the Muslim world.
According to the latest Adva Center annual report dealing with “equality and social justice in Israel,” which was released early Wednesday, the average monthly income of urban Ashkenazi salaried workers in 2012 was 42 percent higher than the average wage among all salaried workers, while Mizrahi urban salaried workers’ wages were just 9% above the average.
Israeli Arab urban salaried workers trailed far behind both groups, earning 34% below the national average, which also factors in workers in rural areas.
The gap is almost unchanged over the past 12 years, the report notes.
The study defined Ashkenazi workers as Israel-born children to a father born in Europe or the United States. It was not clear how the study dealt with US-born Jews of Persian extraction or the large majority of French Jews who are of North African origin.
The report also focused on wage disparity generally in the Israeli economy, noting that the five highest-earning positions in the 100 largest companies traded on the Tel Aviv Stock Exchange averaged an annual salary of NIS 3.421 million ($980,000) in 2012, or NIS 285,100 ($81,400) per month. The average salaried wage in Israel is NIS 9,018 ($2,580) per month. Minimum wage in 2012 was NIS 4,300 ($1,230) per month.
The CEOs of these companies earned 42 times the average wage, and 87 times the minimum wage.
“Alongside the ‘start-up nation,’ which generously rewards its citizens – some 10% of Israeli salaried workers – and even more the managers of large corporations and the top 1% who earn high incomes from capital, there is ‘underclass Israel,’ in which three-quarters of salaried workers earn less than the average wage, and 30% earn minimum wage or below,” the report said.
As to the status of Israeli Arab workers, the report said: “While the nation’s leaders take pride in the low unemployment rate – 5.8% – in Arab towns the figure for those seeking work runs between 15% and 30%, and in many of the [poor] development towns between 10% and 15%.”
The study was deeply critical of the government.
“Inequality is recognized around the world as a social and economic threat. Not so in Israel,” the institute explained in a statement accompanying the report. “Here, the government chooses to deal – or, more accurately, not to deal – [with inequality] through commissions targeting pinpoint issues: the Trajtenberg Committee [on the high cost of living], the committee on economic concentration, or the committee for the war on poverty.
But, Adva insisted, “inequality is a macro-economic and macro-social issue that must be dealt with through highest-level governmental and economic [policy].”
It went on to recommend “creating balanced growth that will create jobs that pay a respectable a living,” and “creating a system of social services that will ameliorate the consequences of unbalanced growth.”
Adva bills itself as “a research institute that specializes in social and economic trends and measures public policy in Israel against the yardsticks of equality and social justice.”
On its website, it warns that “Israel is a classic case of a country whose macro-economic indicators are good but most of whose households are not invited to the end-of-year celebration.”