Study: Income gap between Jews, Arabs grew in past decade

Average Jewish income was 40 percent to 60% higher than average Arab income between the years 1997 and 2009.

shekel versus dollar 521 (photo credit: REUTERS)
shekel versus dollar 521
(photo credit: REUTERS)
The income gap between Jews and Arabs continued to grow over the past decade, despite government efforts to counter the trend, according to a report published this week by the Israel Democracy Institute.
The report found that average Jewish income was 40 percent to 60% higher than average Arab income between the years 1997 and 2009. Jews earned an average NIS 44 per hour across all professions in 2009, while Arabs earned NIS 29 per hour, the report said.
“Other studies have estimated that income gaps between Jews and Arabs decreased from 2004,” Dr. Nabil Khattab, the study’s coauthor, told The Jerusalem Post Thursday. “What we found was the opposite: that the gaps did not decrease, but rather grew.”
The study contended that Israeli Arabs are the victims of an “ethnic penalty” – a term coined by Oxford sociologist Anthony Heath to describe the degree of disadvantage suffered by ethnic minorities in the labor market. To calculate the ethnic penalty, the researchers measured the contrast in wages between Arabs and Jews while controlling all other variables.
The most worrying finding, Khattab said, was that the gap between Arabs with university degrees and Jews with university degrees was now wider than the gap between Arabs and Jews without a higher education. This fact, he said, could discourage Arabs from attending university and could become “a problem for the entire Israeli economy.”
When Arabs enter professions that require higher education, such as pharmacy, those fields undergo a decrease in wages, said Khattab, an IDI research fellow and senior lecturer in sociology and anthropology at the Hebrew University of Jerusalem. This was similar to the effect on wages caused by the entrance of females into specific professions during the feminist era, he said.
“Arabs have entered pharmaceutics in large numbers in the past few years,” Khattab said. “It appears that when they enter the field... they are willing to pay a higher cost, to settle for a lower wage to work in the field for which they are trained. [However], we don’t think Jewish wages escape unaffected. [Rather], we think it causes competition, and then everyone in that same field is harmed.”
“But what we [also] see is that because the number of university-educated Arabs working in all professions continues to rise proportionately to the total Arab population, it constitutes a greater weight in comparison to educated Jews working in those same professions,” he said. “Therefore, proportionately to their weight in the population, it appears that more damage is done overall to the wages of educated Arabs.”
There is greater government recognition today than there was in the 1990s of the importance of integrating Arabs into the workforce. The Prime Minister’s Office established the Authority for Economic Development of the Arab, Druze and Circassian sectors in 2007 for the purpose of maximizing the economic potential of those communities. Likewise, the Industry, Trade and Labor Ministry’s Equal Employment Opportunities Commission was formed in 2008 to protect the labor rights of minorities.
Khattab said he was aware of policy efforts to bridge income gaps, but he suggested that actual wage supervision is required to combat the problems found in his study.
“If there is no mechanism for higher wages, then it will not encourage Arabs to go into higher education,” Khattab said.
“So it’s important that something is done to not reduce the importance of higher education as a driver for socioeconomic change.”