Report: Growth has led to income gap increase

Life expectancy varies by location because of economic differences.

poorman 298.88 (photo credit: )
poorman 298.88
(photo credit: )
The economic gap between the country's rich and poor is getting wider, according to a report published Sunday by Adva-The center for equality and social justice in Israel. According to figures in the annual Israel: A Social Report, the country's top earners in 2005 - those working in hi-tech and financial services - took home net salaries equivalent to 48 times the minimum wage of NIS 3,279 a month, and 22 times more than the average salary. Upper management in the firms included in the Tel Aviv Stock Exchange's TA-25 Index of large companies earned an average of NIS 639,000 per month last year and those in the top 100 earned NIS 421,000 a month, according to the report. "We have gone through three years of economic growth following a recession caused by the second Intifada," said Adva Academic Director Dr. Shlomo Swirski, who prepared the report along with Etty Konor-Attias. "The government and the Bank of Israel keep promising that if this growth continues we'll see income gaps shrink and Israel's standard of living will close in on EU countries, but it seems the income gaps just keep growing." Swirski said that unless the government tackled this problem via its social policy, the gap between rich and poor would become increasingly manifest in all areas, particularly in health, housing, education and welfare. "One study we looked at examined lifestyles of people living in the Negev region. It found that life expectancy there is lower than in other parts of the country," he said, adding that households were now required to pay for health care services that were free in the past. The 36-page report also noted that while the country's top wage earners enjoyed increased salaries in 2005, most of the public saw their income decline. Furthermore, the proportion of people earning minimum wage or less increased from 26.5 percent in 1996 to 34.1% in 2004. "The number of working people living below the poverty line is growing," said Swirski. "The cabinet needs to intervene and raise the minimum wage. It should also be looking forward and planning for the future, especially in education." Adva's research found that 55% of 17-year-olds did not pass their high school matriculation exams, with the vast majority from either the Arab sector or from towns on the periphery. Only 30% of high school graduates went on to higher education within eight years of graduation. "To work in hi-tech, even at the basic level, people need to obtain a bachelor's degree," said Swirski, adding, "The situation cannot be left like this. The picture of inequality of incomes in Israel is definitely worsening."