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Israel: A Social Report – 2013
Dr. Shlomo Swirski, Etty Konor-Atias, Ariane Ophir ,January 29 2014
Dr. Shlomo Swirski, Etty Konor-Atias, Ariane Ophir | January 29 2014 |

The report Israel: A Social Report – 2013 finds Israel at the top of the graphs of inequality and poverty among developed nations, at a time when inequality has come to be recognized throughout the world as a social and economic threat. However, this recognition has yet to be realized in Israel: here the government opts to deal with it – or to be exact, not to deal with it – by setting up committees to effect limited changes, like the Trajtenburg Committee, the Committee on the Concentration of the Economy, or the War against Poverty Committee.


However, inequality is a macro-economic and macro-social issue that needs to be dealt with at the highest level. What is needed is not increasing this or that social security or social assistance payment by so many shekels or decreasing prices by a few percentages, but rather a concentrated effort on two fronts:

A. Creating balanced economic growth that will create jobs that pay a living wage. Side by side with the "start-up nation" that provides a generous remuneration to its citizens – who constitute approximately 10 percent of employed persons – and to an even greater extent the directors-general of the large corporations and the top one percent that benefit from large incomes from capital, there is the other side of the nation, constituting three-quarters of employed persons, who earn less than the average wage and 30 percent of employed persons who earn the minimum wage or less. While the political leadership take pride in the law unemployment rate – 5.8 percent -- we find that in Arab localities job seekers comprise 15-30 percent of the work force and that in Jewish development towns job seekers comprise 10-15 percent of the work force.

B. Creating an array of social services that balance the unbalanced effects of economic growth. Firstly, the general educational level needs to be upgraded: in an era in which employment with a decent wage requires higher education, less than 50 percent of Israeli youth earn matriculation (bagrut) certificates and only 28.8 percent of high school graduates enroll in universities and colleges with 8 years of graduation. Another example: the Israeli social security system receives a relatively low level of funding – 15.8 percent of GDP, compared with 20-30 percent GDP in most western European countries.

The long-term effort to promote and empower the private sector by reducing budgetary allocations for social services was accompanied by a retrenchment of social services, services on which Israelis on the margins of economic development depend if they are to take part in future economic and scientific developments.

Salaries and Household Income

· In 2012, the annual salary bill of directors-general of the 100 largest corporations on the Tel Aviv Stock Exchange was, on average, NIS 4.519 million, or NIS 376.6 thousands monthly.

· The annual salary bill of the five highest earners in these corporations was an average of NIS 3.421 million, or NIS 285 thousands monthly.

· In 2012, the cost of the average salary of a director-general at the largest corporations was 42 times the average wage (NIS 9.018) and 87 times the minimum wage (NIS 4,300).

· The State Revenues Authority publishes figures on income from capital received by self-employed persons. Unfortunately, the latest figures are for 2008: that year, the total income of self-employed Israelis from capital was NIS 18.3 billion. The top one percent received 74 percent of the total: NIS 13.5 billion.

· Israel's Gini coefficient is among the highest in OECD countries: In 2010 Israel was fifth highest among 35 countries, with a coefficient of 0.376. Since the middle of the 1980s, inequality as measured by the Gini coefficient increased in OECD countries by an average of 5.3 percent. In Israel, it increased by 15.3 percent.

· In 2012 women's average monthly wage was 66 percent of men's, and women's average hourly wage was 84.9 percent of men's.

· In 2012, the average monthly wage of employed urban Ashkenazi workers (Israeli-born to fathers born in Europe or America) was 42 percent above the average monthly wage of all employed urban workers. The wages of employed urban Mizrahi workers (Israeli-born to fathers born in Asia or Africa) was 9 percent above the overall average. The wages of employed Arab urban workers was 34 percent below the overall average.

· In 2012 households in the top quintile saved an average of NIS 1,168 per month for retirement, compared with NIS 64 per month for households in the bottom quintile.


· The education system has yet to see 50 percent of the age cohort graduate high school with matriculation diplomas. In 2012, the success rate was 49.8 percent. Similar results were achieved at the beginning of the decade, followed by decreases.

· Among young people graduating high school in 2004, only 34.6 percent had enrolled in universities and academic colleges (not including the Open University and teachers' colleges) by 2012. The enrollees included:

o 38 percent of women, compared with 30.8 percent of men;

o 43.8 percent of Jewish graduates of academic high schools, compared with 30.3 percent of Jews from technological tracks;

o 37.8% of Jewish high school graduates, compared with 10% of Arab high school graduates.

Accessibility to Health Services

· In 2012, the monthly outlay of households in the top income decile for supplemental and private health insurance policies was NIS 499, that of the sixth decile NIS 243 and that of the second decile NIS 111.

· In 2011, the gap between full funding and actual funding of the basket of health services provided by the health funds under the National Health Insurance Law continued to grow. The actual cost was NIS 32.67 billion, while cost of full funding would have been NIS 48.83 billion.

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