Report: Israel nears bottom of OECD countries in consumption inequality

Israel has been consistently ranked among the bottom of OECD countries with regards to income inequality in recent years.

By LIDAR GRAVÉ-LAZI
Updated: NOVEMBER 29, 2016 01:17
‘CURRENTLY, THE ECONOMY is doing pretty well. However, the OECD report’s findings exacerbate my fears that we are not doing enough to prepare Israel’s economy, particularly its job market, for the future.’ (photo credit: REUTERS)
‘CURRENTLY, THE ECONOMY is doing pretty well. However, the OECD report’s findings exacerbate my fears that we are not doing enough to prepare Israel’s economy, particularly its job market, for the future.’
(photo credit: REUTERS)
Gaps in inequality consumption are rapidly increasing in Israel, according to a Sapir College study released ahead of the annual Sderot Conference for Society, set to begin Tuesday.
The report, prepared by economist Dr. Avihai Snir, from Netanya Academic College and Bar-Ilan University, examined the changes in the disparities of consumption in Israel between 2003 and 2014.
Israel has been consistently ranked among the bottom of OECD countries with regards to income inequality in recent years. However, the study has found that it is also approaching the bottom of OECD countries regarding inequality in consumption.
According to the report, one of the most glaring representations of this phenomenon can be seen regarding the housing market.
The study found that between 2003 and 2014, the percentage of people who own apartments remained relatively unchanged, some 82%-85% among the top 10% of the population and 40% among the bottom 10th percentile.
Despite this, the study found that there has been an increase in the density of housing among the poor population, and in contrast, a decrease in the density in the top 10 percentile.
Furthermore, the study found a “significant gap” regarding the value of the apartments owned, spurred by the ongoing housing crisis, which saw apartment prices skyrocket since 2008.
Snir concludes that so long as the trend of housing prices will continue to rise, the difference in values between the top and bottom deciles will only continue to grow.
The study also found that between 2003 and 2011 there was an increase in the number of households whose income was less than the cost of a “basic basket of goods” as presented by the Central Bureau of Statistics.
In 2003, some 63% of the population had a salary that was less than the cost of the basic basket of goods. This figure increased to a peak of 68% of the population in 2011. Snir surmises that this peak could have been one of the catalysts for the social protests, which took place that summer. Since 2011, there has been a small decline so that in 2014 some 60% of the population had salaries less than the cost of basic basket of goods.
On a slightly more positive note, the report did find a minimization of gaps regarding sustainable goods between the top and bottom deciles.
For example, while in 2003 the top 10th percentile had sustainable goods and services such as home computers, home Internet and DVD players at significantly higher rates than the lowest decile, this gap has significantly decreased by 2014.
The author noted that the study did not take into account the quality of the appliances.


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poverty in israel