Wage gap soars despite economic boom

Those in managerial positions enjoy far larger pay raises than their subordinates, according to a new report by the Adva Center for Equality and Social Justice.

By ELIE LESHEM
April 30, 2008 10:23
1 minute read.
shekels coins 88

shekels good 88. (photo credit: )

The disparity in income between employer and employee has grown steadily over the past decade, with those in managerial positions enjoying far larger pay raises than their subordinates, according to a new report released Tuesday by the Adva Center for Equality and Social Justice. Taking inflation into account, the average pay for an hour's work rose only 20 agurot between 2003 and 2006, from NIS 42.7 to NIS 42.9, the report said. But the average annual salary cost for a senior manager in a brokerage firm increased from NIS 1.61 million to NIS 2.17m. during the same period. "The fruits of [economic] growth are unevenly distributed," said Dr. Shlomo Svirski, the author of the report. "On the one hand, we see a rise in the profitability of the employers' asset groups. Conversely, we are seeing only a relatively small increase in the average wage." According to the report, which was released ahead of May Day, the relative shares of employers and employees in the total income of all workers has remained steady over the past two years. However, since 2000, when employers constituted 10 percent of the total income and employees 68%, the gap has grown. In the past two years, those in managerial positions have been receiving 13% of the total income, while those working under them have been taking home a meager 62%. Had the employees' slice of the pie been 66% in 2007, they would have earned NIS 23.2 billion more as a group, the report said, adding that this would have meant NIS 8,000 more per worker per year. Quoting from the Bank of Israel annual report for 2007, the report said: "A moderate increase... in wages during a period of growth is a phenomenon that is hard to explain."


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