OECD: Rich earn 14 times more than poor in Israel

Report indicates Israeli income inequality gap widening; inequality among highest in the West.

December 5, 2011 15:24
2 minute read.
A homeless man lies on a sidewalk

poverty homeless dirty 311. (photo credit: Marc Israel Sellem)


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Income inequality in Israel is among the highest in the developed world, according to a report released Monday by the Organization for Economic Cooperation and Development (OECD). The report indicates that the gap continues to widen despite the fact that Israel was already considered a high-inequality country.

Israel was singled out as one of only two OECD countries in which the real income of those at the bottom of the income ladder actually fell in comparison with the mid-1980s.

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The richest ten percent in OECD countries earn, on average, nine times that of the poorest ten percent. In Israel, the richest ten percent earn over 14 times that of the poorest 10 percent. The United States  and Turkey were in the same income equality bracket. The richest ten percent earn over 27 times more than the poorest ten percent in Mexico and Chile.

Using the Gini coefficient, a measure of income inequality that ranges from 0 (where all incomes are identical) to 1 (where all income goes to one individual), Israel measured a 4 percent increase.

The rich-poor divide did not increase in all OECD member states. A number of countries managed to significantly reduce income inequality, including Chile, Mexico, Turkey, Greece, and Hungary.

Student Union Chairman Itzik Shmuli said Monday that "today's OECD report confirms what Israeli citizens have known for a long time already, and is the reason they began protesting." Shmuli's comments were in reference to the 2011 social justice movement, which was launched when 26-year-old Daphni Leef pitched a tent on Tel Aviv's Rothschild Boulevard in protest of high housing prices. The move quickly developed into mass protests, a national movement that lasted for months. In response, the government launched the Trajtenberg Committee on Socioeconomic Change and approved some of its recommendations in October.

Shmuli added his call for Prime Minister Binyamin Netanyahu to "demand an immediate solution for the situation and to release real proposals for the apartment shortage, the education system, and the welfare system instead of continuing to concentrate on tax exemptions for online shopping and other inconsequential dreams that the Treasury is promoting on the back of the protests."

Israel joined the OECD in May 2010 after it fulfilled a number of the organization's recommendations: more efficient supervision of employers’ pension obligations; support for the integration of people with disabilities into the workplace; an increase in Arab representation in the public sector, including support for companies that promote the employment of minorities; creation of a framework for granting foreign workers permanent visas, as is the practice in Europe; and modification of prerequisites for receiving unemployment benefits.

Nadav Shemer contributed to this report

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