Israel: A Social Report – 2013

The Gap between “Start-up Nation” and the Rest of the Nation

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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.


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:


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.


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:


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


43.8 percent of Jewish graduates of academic high schools, compared

with 30.3 percent of Jews from technological tracks;


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

school graduates.

Accessibility to Health



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.