Wage gap between Ashkenazi, Sephardi Israelis growing - report

The wages of Arab citizens were significantly lower than other population groups, with men earning NIS 7,723 and women earning NIS 5,370 on average.

April 1, 2019 06:32
3 minute read.
Stacks of Israeli shekel notes [Illustrative]

Stacks of Israeli shekel notes [Illustrative]. (photo credit: NIR ELIAS / REUTERS)


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The wage gap between Israelis of Ashkenazi and Sephardi origin has started to widen again after years of narrowing, according to the annual social report published by the Adva Center policy analysis institute on Sunday.

In 2017, the average wage of second-generation Ashkenazi (Eastern European) immigrant men stood at NIS 16,961, 36% higher than the average wage of second-generation Sephardi men, which stood at NIS 13,291.

According to figures published by the Central Bureau Of Statistics, the average monthly wage for Israeli workers stands at NIS 10,095.

While the report states that the wage gap between the two population groups has started to grow after years of gradual reduction, the nonpartisan institute added that it remains unclear whether this is just a transient occurrence or the start of a trend.

Wages of Arab citizens were significantly lower than other population groups, with men earning NIS 7,723 and women earning NIS 5,370 on average.

Low wages were also recorded among first-generation Jews of African-Asian origin, primarily Ethiopian Jews, who immigrated after 1990. In 2017, the average wage for men stood at NIS 8,247 and women at NIS 5,568.

According to the latest figures published by Bituach Leumi (the National Insurance Institute) regarding income in 2016, the median wage for Israeli men was NIS 12,446 compared to NIS 8,469 for women.

While there has been a decline in gender inequality in recent years, the gap between median wages remains at 21.6% – significantly higher than the OECD average of 13.8%. Among OECD countries, only South Korea, Estonia and Japan have a greater gender wage gap.

Since 2000, the share of household income from work, compared to capital, benefits and pensions, has increased across most deciles.

This increase, while partly due to the increase in minimum wage, negative income tax programs and employment support programs, mainly reflects an increase in the number of wage earners in Israeli households.

The report states, however, that the increase of household breadwinners has not significantly changed the income scale, with many hired in low-wage or part-time jobs in services such as sales, caregiving, security and restaurants.

A large percentage of those under the poverty line were registered as working in industries such as construction (22.5%) and transportation (12.2%).

“This edition of the report has been published on the eve of elections and, on the face of it, there should currently be an open, public debate on public policy objectives. Unfortunately, this is not the case,” said report co-authors Dr. Shlomo Swirski, Etty Konor-Attias and Aviv Lieberman.

“The labor market, as it stands today, does not allow all Israelis an adequate standard of living. This is because there is a deep divide between the narrow ‘Start-Up Nation’ and the large periphery. The state must break down the barriers of the Start-Up Nation and invest in balanced economic development in all parts of the country and all parts of the population.”

The report also revealed that, as of 2017, 28.3% of Israeli households did not own their property, with most turning to the private rental market. The share of those living in rented properties rose from 24.3% in 2007 to 27.9% of households in 2017, contributing to a nationwide rental market worth NIS 15.7 billion.

The statistics also showed a huge increase in household expenditure on health insurance contributions and premiums since the turn of the millennium. In 2000, households spent NIS 4.6b. (adjusted to 2017 prices) on health, compared to NIS 13.9b. in 2017.

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