Report shows major wage gaps between Ashkenaziom and Mizrahim, persistent gender gap

New report shines light on wealth gaps between different ethnic groups in Israel, men and women, Jews and Arab-Israelis.

JANUARY 29, 2014 09:37

Money cash Shekels currency 521 (photo credit: Reuters) — Money cash Shekels currency 521

(photo credit: Reuters)

Jews of European or American descent (Ashkenazim) earn significantly more than those of Asian or African descent (Mizrahim), while Arabs earned the least, a study the Adva Center published on Wednesday shows.

Ashkenazim earned 42 percent more than the average urban worker in 2012, while Mizrahim earned only 9% more than the average, an improvement over recent years. Arabs, on the other hand, earned 34% below the average, exhibiting a continuing decrease from previous years.

“The gap between Ashkenazim and Mizrahim is explained by different education levels and occupations, but also by discrimination and different opportunities and starting points of each ethnic group in the Israeli labor force,” said Ariane Ophir, a research assistant at the Tel Aviv-based Adva Center policy analysis center.

Shas MK Eli Yishai said the gaps stemmed from inadequate investment in education in the periphery, and that the state had to change priorities if it did not wish to see similar reports year after year.

“The time has come that the topic of Sepharadim-Ashkenazim, in every respect to gaps between them, will be just a forgotten part of the State of Israel’s history,” he said.

Shas chairman Arye Deri called on Prime Minister Binyamin Netanyahu and Finance Minister Yair Lapid to undo budget cuts that affect poor groups.

“The right to welfare for immigrants from Morocco, Iraq and Yemen is not less than citizens of any other origin,” he said.

The study pointed to other forms of inequality as well.

In 2012, the average woman’s monthly wage was 66% of a man’s, though a significant portion of that gap resulted from the fact that women are more likely to work part-time or temporary jobs. On an hourly basis, however, women earned 84.9% of what men did.

The persistent gap, said Ophir, “is mostly explained by the gender segregation of the job market. Due to this, even when they are working full time, women are employed in low paying occupations.”

Although the unemployment rate in Israel was relatively low at 5.8% compared with many Western countries, Arab communities experienced much higher unemployment – between 15% and 30%. Israel’s poorest Jewish communities had between 10% and 15% unemployment.

The gender gap was a slight reduction over recent years, but in comparison to other well-off countries, the 16.3% difference between men’s and women’s wages put Israel in the middle; in Estonia it is above 27%, while countries such as Luxembourg, Poland and Slovenia have gotten theirs well below 10%.

There was a yawning chasm between average workers and top executives; in 2012, CEOs made an average of NIS 376,000 a month, 42 times the average national salary of NIS 9,018, and 82 times the minimum wage of NIS 4,300.

That difference pales in comparison to the United States, where CEOs earned 354 times the average in 2012.

The last time American CEOs earned “just” 42 times the average was in 1980.

Reenat Sinay contributed to this report.