Study: Workers' share of national income stagnant

Employers' share on the rise according to report which focuses on 'median wage' not 'average salaries' to accurately represent workers' conditions.

International workers day 370 (photo credit: REUTERS)
International workers day 370
(photo credit: REUTERS)
While employers’ share of the national income grew in 2012, workers’ share remained the same as it was in 2011, 62 percent, according to a report released Wednesday.
The study was carried out by the Adva Center – which examines Israeli society from the perspectives of equality and social justice – and was released to coincide with May Day.
The report shows that while their share remained stagnant in 2012 and was significantly lower than it was 10 years ago – 67% – workers did benefit from job growth and the continuing decline of unemployment, which stood at only 6.9% last year.
According to the study, employees should have earned, on average, an additional NIS 10,924 in 2012, which is equivalent to NIS 910 per month.
Between 2002 and 2012, national income grew by 46%, workers’ income increased by 35% and employers’ income grew by 160%.
During that decade, the median salary per employee did not exceed 63% of the average salary per employee.
The data also showed that employers’ participation in funding social benefits for their employees is lower than in most developed countries.
The study also revealed that in 2011, 25.8% of employees in Israel received a salary defined by the OECD as low. The country’s lowest earners include 34.7% of Israeli women, 34.3% of the Arabs living in Israel, 34% of people who lack a high school diploma and 26.8% of the country’s immigrants from the former Soviet Union.
“What this data means is first of all that our economy is an economy with relatively low salaries,” Dr. Shlomo Swirski, one of the researchers who issued the report, told The Jerusalem Post on Wednesday.
Swirski explained that the Adva report focuses on the median wages rather than average salaries because averages are not representative of workers’ conditions.
“When we talk about average, we also include Israel’s successful hi-tech industry for example, where the average wage is double the average wage of the rest of Israeli society,” he told the Post.
“It’s nice, but hi-tech really only constitutes some 13% of the country’s economy, so looking at the average is not representative.”
“If we want a higher living standard and higher salaries, we need to expand the hitech industry,” Swirski stated.
“For that, we... need to improve our education system, which today does not produce enough hi-tech workers.”