Report: Israel's wealth gap only getting worse

Ashkenazim earn 136% of national average.

poor kids crying 298.88 (photo credit: Ariel Jerozolimski)
poor kids crying 298.88
(photo credit: Ariel Jerozolimski)
The rich are increasingly raking in more of the money in Israel and the gaps in wages between men and women and Jews and Arabs persist, according to a new report put out by the Adva Center Tuesday. Since 1990, the top 20 percent of the country has increas ed its share of the salaries earned from 40 to 44%. The report determined that a wage earner in the top financial 10% of the nation in 2004 earned over 12 times that of someone in the lowest 10%. And executives in Tel Aviv's top 40 firms were, on average, 43 times higher than the minimum wage, and 19 times higher than the average wage. In a further demonstration that the economic surge since 1990 was not evenly dispersed throughout the country, the study noted that textile and food industries suffered s ince 1990, experiencing only 4% growth, while the high-tech industry sector experienced 100% growth. Women continue to receive lower salaries than men, having earned on average only 63% of men's average wages each month, or 84% of male hourly pay in 2004. While Ashkenazis per capita earned 136% of Israel's average salary in 2004, Arabs earned only 75%. Mizrahi Jews earned exactly at the average. "The country is doing very well for a small sector of the population, most of whom live in the center of the country," said Adva director Barbara Swirski, who stressed that the situation didn't only affect the poor. "The middle class is having a hard time." She added that government policy had contributed to the problem: "The government has accepted the ideolog y of lowering public spending, which means increased private spending." But economist Eran Bar-Tal, who heads Citizens for True Social Justice, said that the problem was the opposite: Large government and its policies discouraged foreign investment, whic h would grow the GDP. "The main problem of the Israeli economy is [low] prosperity, or GDP," he said, noting that Israel's per capita GDP is only about half of that of OECD, or developed, countries. The report noted that Israel's GDP in 2003 - $16,452 - was a marked increase over 1980's $5,612, but argued that the positive growth wasn't shared by enough of the population. Adva didn't give the raw numbers of salary growth over that time, as Swirski explained, "What's important is not your absolute incre ase but how well you fare in your overall society... how good you feel in your society is how close you feel to the so-called normative Israeli." Feeling left behind wealth-wise, Bar-Tal said, not only contradicted the values of democracy, which seeks to let all citizens share in prosperity. He asserted that it also encouraged young people to leave Israel for countries where they could feel better about their financial future. The Adva Center, a socioeconomic think tank, used statistical information from the Central Bureau of Statistics and the Bank of Israel in compiling its report, released annually since 1998. Tidhar Ofek contributed to this report.k