Adva report: Israeli middle class still shrinking

Report shows more low-income employees; top executives earning average of NIS 8.4 million.

poverty metro 88224 (photo credit: Jerusalem Post Archives)
poverty metro 88224
(photo credit: Jerusalem Post Archives)
The nation's middle class continued to shrink, according to the Adva Center's annual report released on Sunday. The report showed that the number of middle class families has dropped by 16% over the last 20 years. Some 57% became part of the lower class, while the remaining 43% moved on to the upper class, the Adva report stated. According to Adva, in 1998 28.8% of the workforce earned less than minimum wage, while in 2006 that number rose to 35%. The most dramatic salary changes were noted among executives working for top companies traded on the Tel Aviv Stock Exchange, who have on average nearly doubled their monthly wages from NIS 378,000 in 1998 to NIS 703,000, bringing their annual income to NIS 8.43 million. Although the Israeli economy saw a yearly 5% growth since 2004, due to the economic decline of 2001-2004 the total rate of growth between 1998-2006 was only 40 percent, the report said. This is substantially less than the world average of 72%, led by developing countries such as China, India and those in the Persian Gulf, but also meager compared to the growth rates of Western industrialized countries, such as the US (60%) and the EU (63%), the organization said. The difference between the income of women and men did not change over the years 1998-2007, and the average hourly rage of women remained at 80% of their male counterparts, Adva noted. Average wages of different ethnic groups in Israel improved slightly over the years. Second-generation Israelis of Ashkenazi descent still earn much more than second-generation Israelis of Sephardic descent. While the income gap between the groups stood at 45% in 1998, it still remained high, at 31%, in 2007. The income level of Israeli Arabs, however, did not improve over the same period and remained approximately 30% below the general income average. The percentage of poor families in Israel did not change. While in 1998 17.9% of the households were poor, in 2007 the rate was 17.4%. In the Arab sector, however, there was a dramatic increase in poverty, with rates rising from 36.9% to 51.4% over the same period.