The economics of bigotry

More than six decades after the establishment of the state, we have failed to eradicate inequalities between Ashkenazim and Mizrahim.

Money Shekels bills 521 (photo credit: Courtesy)
Money Shekels bills 521
(photo credit: Courtesy)
A study on income inequalities in Israeli society the Tel Aviv-based Adva Center published this week reports both positive and negative developments.
On one hand, the glass is half full because income gaps between Mizrahim and Ashkenazim have gradually narrowed over the past 30 years. However, the glass is half empty because more than six decades after the establishment of the state, we have failed to eradicate inequalities between those born to a father of Asian or African descent and those born to a father of European or American descent.
And if we compare Jewish Israelis to Arab Israelis, the gaps are far more severe and show no signs of narrowing.
In 2012, Ashkenazim living in urban areas earned 42 percent more than the overall average; Mizrahim earned 9% more.
Arabs earned 34% below the average.
Adva’s study, and one that Prof. Momi Dahan, head of the Hebrew University’s Federman School of Public Policy and Government, published in October 2013, found that the gaps between Ashkenazim and Mizrahim have been narrowing over the past few decades.
Dahan’s study found, for instance, that 15 years ago the average income gap between Ashkenazim and Mizrahim was 40 percentage points, whereas it was 25 percentage points in 2011. Dahan also found that increasing numbers of Mizrahim are represented in the top 10% of wage earners, though Ashkenazim are disproportionately represented in that group.
Dahan said that there were two main reasons for the gradual improvement in the incomes of Mizrahim.
First, Mizrahim have been using education as an equalizing force. In Israel and around the world the gap is growing between those who are educated and those who are not. Mizrahim, whose starting point educationally speaking was lower than Ashkenazim, have over the decades taken advantage of education to better their socioeconomic situation. And since educated Mizrahim are given opportunities to advance, they have faith that they will succeed in integrating into the job market and are encouraged to pursue higher education. If there were serious discrimination in Israeli society against Mizrahim in the job market, says Dahan, education would not help and many Mizrahim would be discouraged from pursuing higher education.
Another major factor is the sharp rise in the number of Mizrahi women who have entered the job market.
Today there are no differences between Ashkenazi and Mizrahi women when it comes to the level of participation in the labor force. Also, from a sociological perspective, Mizrahim have adopted the Western family model of having fewer children and marrying at a later age.
Unfortunately, Arab Israelis continue to suffer from high levels of discrimination. Jews own most businesses in Israel, and most Jews prefer to hire other Jews, even if an Arab candidate has comparable or better skills. Also, because Arab Israelis are exempt from serving in the IDF, they do not make important contacts that can help them in the business world later on. The Arab educational system is underfunded and, like schools in periphery Jewish towns, the level of teaching and the level of students is lower. And because Arabs are acutely aware that even if they excel academically, they have little chance of making it, many opt not to bother in the first place.
All forms of bigotry, whether directed against Mizrahim or against Arabs, are ultimately self-defeating on a number of levels. Talented people who have much to contribute to our economy are not given a chance because of irrational considerations.
The loss resulting from this unused potential is not just what could have been created or invented but was not. Discrimination breeds discontent, social instability and unrest.
We must fight all forms of discrimination. Ashkenazim, Mizrahim and Arabs will all benefit if we do.