Income disparity on the rise in Israel, study shows
If distribution of gains among employers and employees were the same as a decade ago, workers would have been paid NIS 11,000 more in 2012
Aaron Kalman is a former writer and breaking news editor for the Times of Israel
While Israel’s national income rose 10 percent over the past decade, the salary gap between employers and employees in the Israeli market grew larger by the year, depriving workers of much of the fruits of Israel’s accelerated growth, according to a report published Wednesday.
Parsing data taken from the Central Bureau of Statistics, researchers for the Adva Center found that the gross national income grew from NIS 541 billion ($151 billion) in 2002 to around NIS 788 billion ($220 billion) in 2012. However, while the percentage of that income held by the employed dropped from 67% to 62%, the share of the employers nearly doubled — from 8% to 15%.
If the distribution of income had remained in 2012 as it was in 2002, with employees holding 67% of the pie, employees would have received NIS 11,000 ($3,000) more a year in wages, the Adva Center said in the annual study (Hebrew text here).
The study pointed out that the effect of increasing disparity between Israel’s classes was mitigated by the accelerated growth of the past decade, so that “a drop in the workers’ share of the national income… doesn’t necessarily indicate a drop in their salary… since, if it occurs during significant [economic] growth, the workers’ standard of living doesn’t have to be negatively impacted.”
The study said that the median income in Israel was only 61% of the average in 2012, and over the last decade hadn’t once exceeded the 63% mark.
According to standards set by the Organization for Economic Co-operation and Development (OECD), some 25% of Israelis earned a “low income” during 2012, with a monthly salary of under NIS 4,200 ($1,200). The proportion of Arab and women workers with low incomes was higher than their share in society — over 34% of Israeli Arabs worked in low-paying jobs, as did nearly 35% of women.
A description on the Adva Center’s website says it is “a research institute that specializes in social and economic trends and measures public policy in Israel against the yardsticks of equality and social justice.”
