Recently the Government Employment Service published figures on persons released on leave without pay or unemployed during the month of October.

According to that publication, in October, there were 42,400 new employment seekers, due to their having been sent on leave without pay, 59% of them women; it appears that women will feel the brunt of changes in the labour market resulting from the war more than men. An examination of the occupations in which large numbers of persons were released on leave without pay makes this phenomenon clear. Those are occupations in which women constitute the majority: salespersons and service providers (53% women), caregivers and assistants in the area of healthcare (87%), and managers in the area of administrative services (51% women).[i]

Among the occupations which the publication stated had the highest likelihood of being released on leave without pay in the near future were employees in the area of personal services, among them distinctly female occupations: cosmeticians, hairdressers and beauty salon workers, as well as salespersons and customer service  people — most of these female occupations.[ii]

Being sent on leave without pay costs the employee. Employment compensation for young people up to age 28, who constitute a large group of persons on leave without pay, is between 70% and 80% of salary for low earners, about 60 % of salary for persons with average pay, and about 40% for persons with high salaries.[iii]

Women constitute the majority among persons paid by the hour, especially in caregiving occupations, and as such they are more likely to have their hours and pay cut, and if sent on leave without pay their social rights are also diminished: pension savings, sick leave, vacation pay.

Not only that: severance pay packages do not apply to parents of children up to the age of 14 and children with special needs that were absent from work due to the closure or partial operation of schools: this in accordance with the instructions of the Home Front Command. In some localities, like Netivoth, Beer Sheba, Ofakim and Ashkelon, no frontal teaching has taken place since the beginning of hostilities. As women are the main caregivers of children and earn, on average, less than men, it is reasonable to assume that women are more likely to remain at home with the children than men.

The problem is especially acute in the private sector, in economic branches whose income has been adversely affected by the war situation. In such cases, the employer is unable to afford salary expenses, and the burden falls on parents who use their paid vacation days to stay home with the children or, if they have already used them up, absent themselves from work without pay. In such a situation, they become more vulnerable to a reduction in their working hours or to layoffs.

References:

[i] Central Bureau of Statistics. Manpower Survey 2020. Table 2.18. Figures are for 2019.

ii] Ibid.

[iii] National Insurance Institute. Table of Unemployment Compensation.

הפוסט In Times of Crisis, Women’s Employment is More Precarious than Men’s הופיע לראשונה ב-Adva Center.

Israel’s top one percent received the most expeditious state protection and benefits. The Bank of Israel supported big corporations by purchasing 15 billion NIS worth of corporate bonds. This aid contributed to the fact that while the real economy shrunk, the Tel Aviv 90 Index increased by some 18% in value during the first year of the corona epidemic.

The government exempted the wealthy from the burden of participation in financing the costs of the corona crisis. Israel expended an estimated NIS 137.3 million on aid to businesses and citizens. As this sum was not budgeted, it increased the budgetary deficit and the national debt. The Netanyahu-Gantz coalition did not consider raising taxes, despite Bank of Israel declarations that tax increases were unavoidable.

If tax increases are not imposed on the wealthy, such increases will either fall to the lot of the middle class or, alternatively, result in the privatization or reduction of public services – moves that will hurt middle and low-income families. In light of these possibilities, the report recommends imposing a wealth tax.

Hi Tech in Times of Corona: Like its ultra-rich, Israel’s hi tech sector has not been adversely affected by the corona epidemic. In fact, the hi tech sector continued to grow despite the corona crisis. For example, the financial newspaper The Marker reported in January 2021 that “the 13,500 hi tech workers employed in the ten largest technology companies listed on the stock exchange gained no less than 2.5 million dollars in income.”

Small Businesses in Times of Corona: Small businesses are the main reason for the increase in employment in the Israeli economy that occurred over the past two decades and the concomitant decrease in unemployment. While the businesses in question are small, together they constitute the largest employer in the Israeli economy. In 2018, small and medium sized businesses accounted for 1.92 million employee posts, or 60% of the 3.17 million posts in the private sector.

Small businesses were the main losers in the corona crisis, primarily service providers, many of whom had become upwardly mobile due to increased consumption in the decades preceding the crisis. In 2020, private per capita consumption in Israel decreased by 11.1%, more than the average in OECD countries – 6.3%.

Dun and Bradstreet estimated that in the first half of 2020, 37,600 Israeli businesses shut down, among them 1,550 restaurants, bars and coffee shops; more than 1,000 construction and renovation firms; some 600 transportation companies; and 450 clothing shops. Their estimate was that by the end of the year, 80-85 thousand businesses would close down – an increase of 85% over 2019.

The chief economist of the Israel Ministry of Finance estimated in May 2020 that 54% of workers furloughed were employed in small businesses.

Food Insecurity in Times of Corona: The highest proportion of persons reporting food insecurity during the corona epidemic was found among Arab citizens of Israel. In April 2020, 23.5% of Arabs reported that they or members of their family had reduced the amount of food or the number of meals during the previous week, compared with 14.1 % among persons in the general population of Israel aged 21 and over.

Inequality in Health in Times of Corona: Israelis of low socio-economic status sickened more than Israelis of high socio-economic status, among other things due to the higher incidence of health risk factors like high blood pressure and diabetes among them.

The corona epidemic threatens everyone, but the threat is especially acute for persons whose living conditions promote contagion. Housing density and household size are larger among Haredi Jews and Arab citizens of Israel than among others, resulting in greater susceptibility to infection from the virus.

Another factor influencing the rate of illness from the corona virus is the sense of alienation of these same two population groups from the central government of Israel and its institutions, resulting in indifference or non-compliance with official instructions issued as to how to keep safe from contagion.

The result: the death rate of Arab citizens of Israel aged 60 and older from the corona virus was three times that of non-Haredi Jews; and the death rate of Haredi Jews four times that of non-Haredi Jews.

Mental Health in Times of Corona: The corona epidemic has had an adverse effect on the mental health of Israelis. During the first lockdown, about one-third (34%) of persons aged 21 years and over suffered from tension and anxiety. That proportion rose to 42% when the lockdown was lifted in July 2020. In November 2020 the proportion decreased to 37% — still quite high. Those reporting the greatest suffering from tension and anxiety were women and Arab citizens.

Feelings of loneliness and depression were revealed by the Citizen Resilience Survey conducted by the Israel Central Bureau of Statistics, which showed that in April 2020, 30% of interviewees aged 65 and over reported loneliness and 19% reported depression, compared with 24% and 16%, respectively in the general population.

Housing in Times of Corona: Before the outbreak of the epidemic (2018), Israeli households from the bottom income decile living in rental housing expended 54% of their disposable income on rent and related outlays. For households in the second lowest income decile, that expenditure constituted 34% of their disposable income; in both cases, housing expenditure was higher than the 30% considered the maximum households should have to pay for housing. The economic hardships of the epidemic for households residing in rented housing led to an increase in requests for rent assistance, along with an increase in the number of eligible households waiting for public housing units.

While the economic crisis accompanying the corona epidemic had an adverse effect on renters as well as on home owners with mortgage payments to meet, the benefits given by the government in the area of housing were directed not to them but rather to persons purchasing housing units as investments. With the expressed purpose of stimulating business in the real estate sector by incentivizing investors,  in July 2020 the purchase tax for investors was reduced, thus abrogating the increase made in 2015 to discourage real estate investments in favor of the purchase of own homes.

The full report is available in Hebrew here

// The report was produced in cooperation with the Friedrich Ebert Stiftung, with support from MAZON: A Jewish Response to Hunger and The New Israel Fund

הפוסט Social Report 2021 – Corona: Epidemic of Inequality הופיע לראשונה ב-Adva Center.

Dr. Shlomo Swirski, co-author of the report, contends that “the economic miracle of which the government boasts is relevant mainly for a minority of Israelis, whose achievements raise the general average. A real miracle will occur if and when Israel jettisons its policy of budget austerity and limited responsibility in favor of a balanced economic growth that benefits the general public. Dependence on the private sector with hi-tech at its head as the engine that will pull the whole economy forward has no basis in reality. The research and development centers that multi-nationals established here are interested mainly in “milking” the ability of Israelis; the present supply of educated manpower is sufficient for them and they have no incentive to expand the limits of the “start-up nation” located in Tel Aviv and its environs.”

Economic Growth
The Israeli economy did experience growth; however that growth was based to a great extent on an increase in private consumption – car imports, for example – which it can be assumed reflected the demands of the upper income deciles and led to their upgrading their own standard of living. The other side of the coin is the expansion of employment serving, usually at low wages, the increasing consumption of the upper income deciles, like saleswomen, waitresses, security officers, and the like.

“Let Them Go Out and Work” – and They Did
As Minister of Finance, Binyamin Netanyahu was responsible for widespread cuts in social security, under the slogan, “Let them go out and work.” The cuts, together with various programs designed to encourage employment, did indeed push many people into the job market. Between 2000 and 2016, the number of bread winners in households in the bottom income decile grew by 58%, in the second lowest, by 73%, in the third, by 45% and in the fourth, by 35%.

From the perspective of the new bread winners, there is much to be said for being in the job market, as living from work is considered more respectable than living from social security payments. However, the addition of more bread winners, even if it did increase household income, did not lead to a significant change in the distribution of income. Many of the new bread winners found workplaces hiring on a part-time basis paying low wages. In some instances this was done at a high social cost, for example, for men and women working at exhausting jobs in which they experience burnout.

The top income decile earned 12 times the bottom income decile; the top centile – 23 times the bottom income decile
Since 2012, the gross income of households in all income deciles grew by between 10% and 17%. At the same time, income gaps remained high: in 2016, the average gross monthly income of households in the top income decile was NIS 58,846, 12 times the average income of households in the bottom decile – NIS 4,898.

Discussions of income inequality usually focus on gaps between the different income deciles, but the gaps within the top income decile itself are especially high. In 2016, the average monthly income of the top centile of households – NIS 113,621 – was 2.2 times the average income of the nine other centiles in the top income decile, and 23 times the average income of the bottom income decile. In other words, households in the top centile are worlds away from the economy of the remaining 99% of households in Israel.

Tell me How Much You Earn and I’ll Tell You Where You Came From
The recent improvement in salaries is more notable among women than among men. Between 2000 and 2015, the percentage of women earning more than the average wage increased from 18.6% to 25.9%, while for men the increase was from 37.7% to 43.9%.

In 2016, the top of the income ladder was occupied by first generation Ashkenazi men who had arrived in Israel by 1989, with an average monthly wage of NIS 17,640; next were second generation Ashkenazi men, with NIS 15,099; followed by second generation Mizrahi men, with NIS 14,406; first generation Mizrahi men who had arrived by 1989, with NIS 12,761; Ashkenazi men who arrived after 1990, with NIS 12,005; and first generation Ashkenazi women who had arrived by 1989, with NIS 11,037.

A significant reduction occurred in the gap between second generation Ashkenazi and Mizrahi men. In 2016, the average salary of second generation Ashkenazi men was NIS 15,099, 55% above the overall average, compared with the average salary of Mizrahi men, which was NIS 14,406 – 48% above the overall average. Second generation Ashkenazi women earned an average of NIS 9,017, 93% of the overall average, compared with NIS 8,640 – 89% of the overall average, for their Mizrahi counterparts.

The average salary of Arab citizens of Israel was very low, compared to the overall average: in 2016 the average salary of Arab women was 51% that of the overall average and the average salary of Arab men was 76% of the overall average.

The average salary of Ethiopian Israeli men was similar: In 2016, the average salary of men was NIS 7,233 – 74% of the overall average.

Ethiopian Israeli and Arab women were at the bottom of the salary scale, with averages of NIS 5,376 and NIS 6,004, respectively.

A College Education Does not Always Promise Escape from Poverty
In 2015, Arab households living in poverty headed by persons with at least 16 years of schooling constituted 7.3% of all Arab households living in poverty, up from 2.6% in 2000. Jewish households living in poverty headed by persons with at least 16 years of schooling constituted 23.7% of Jewish households living in poverty, up from  14.5% in 2000.

And There are Some Who Forego Even Food
The economic situation of some Israelis is so dire that they are forced to forego the most basic of human needs: food. The proportion foregoing food grows with declining income: in 2013, 38.5% of persons of 20 or older in the lowest income bracket (households earning on average up to 2,000 per person) reported foregoing food.

Income Gaps are Higher after Retirement
In 2016, 25% of Israeli households headed by persons aged 25-54, most of them in the lower income deciles, were not saving for retirement. That same year, the average income from pensions of the top income decile of households headed by persons aged 68 and above was NIS 14,822. That was 25 times higher than the income of households in the third decile – NIS 562.

Only One-Third of the Cohort Goes to College
Looking at the cohort that graduated from high school in 2008, we find that only 79.2% of the age cohort was enrolled in the last year of high school leading to matriculation. That year only 44.4% of the age cohort passed their exams. Among those who passed, some had diplomas that did not entitle them to admission to institutions of higher learning. The result: only 32.4% of persons who were 17 years old in 2008 entered a university or an academic college by 2016 – 8 years after they graduated from high school.

The education gaps among different socio-economic groups are far from closing. Among students from localities in socio-economic clusters 1-4, the proportion going on to academic studies, which was quite low in 2000 – 22.1% — remained low 8 years later, in 2008 – 23.6%. During the same time, students living in localities in socio-economic clusters 8-10 went on to college at greater rates – increasing from 45.3% in 2000 to 53.1% in 2008 – an improvement of 17%. The four middle socio-economic clusters showed an improvement of 14%.

Most Israelis Cannot Purchase an Apartment in High-Demand Areas
For 60% of Israelis, purchasing an apartment in areas of high demand without significant capital of their own results in a lowering of their standard of living, due to high monthly mortgage payments.

Purchasing apartments as an investment is the prerogative of the affluent. In 2016, 29.1% of households in the top quintile owned at least two apartments – compared with 1.6% of households in the bottom quintile, 2.5% in the second quintile and 6.8% in the third quintile.

Health Has Become a Financial Matter
Private health insurance has become a huge financial bonanza: household expenditure on private health insurance (of both the health funds and insurance companies) and users’ fees for medications and treatments amounted to NIS 4.6 billion (2016 prices) in 2000; in 2016 the amount more than doubled to NIS 13 billion. One could argue that this is a tax just like the health tax paid to the National Insurance Institute (in 2016 the National Insurance Institute collected NIS 21.9 billion). However, in contrast to the health tax, which provides universal care, the tax paid by purchasers of private health insurance benefits only those who can pay more.

The Government Fails to Balance Market Forces
In 2015, civilian expenditures amounted to 30% of GNP. As everyone knows, Israel’s defense expenditure is high, compared to that of other western countries. Still, the low civilian expenditure can be attributed more to the policy of fiscal austerity than to high defense expenditures, which have declined in recent years as a percentage of GDP.

Civilian expenditures include, among others, monies designed to assist households and individuals in times of distress, like old age and disability pensions, services for infants, the elderly and the disabled, and tax benefits. In 2016, civilian expenditures in Israel amounted to 16.1% of GDP, compared with the average of 21% in OECD countries.

הפוסט Israel: A Social Report – 2017 – An Economic Miracle for the Few הופיע לראשונה ב-Adva Center.

Even if the difference is a few percentage points, the amounts are quite large. In 2014, for example, Israel’s national income totaled NIS 927 billion. One percent of this was NIS 9.27 billion. Had the workers’ share remained the same as it was in 2004 – that is 61% (and not 57% as it was in 2014), workers as a whole would have received in 2014 NIS 37.08 billion more in salary. If we divide that sum by the number of persons in the labor force in 2014 – approximately 3.8 million (including soldiers in compulsory and professional service; not including foreign workers) – we will find that for that year, each worker would have received, on average, an annual addition of NIS 9815, or about NIS 818 per month. However, the addition went to employers, not to workers.

Further evidence of the worsening of the share of workers: between 2004 and 2014, the national income grew by 52%, while the share of employers grew by 78% and the share of workers by only 42%.

Additional findings of the report:

· In 2013, 27.5% of employed persons received salaries defined by the OECD as low – up to two-thirds of the median salary. The share of low-income workers in the national income was 7.2% in 2013. At the same time, the share of the top one percent was 6.9% of the national income – similar to the share of more than one-fourth of workers.

· Among low-wage earners were to be found 35% of women workers, 30.9% of Arab workers, 36.1% of workers lacking matriculation diplomas, and 26.9% of workers who were immigrants from the former Soviet Union.

· In 2014, the average monthly salary bill of top executives of the 25 largest corporations traded on the Tel Aviv Stock Exchange was NIS 417,000, lower than that of 2013. Still it was 44 times the average salary of Israeli workers and 97 times the minimum wage.

· The social security benefits paid by Israeli industrialists are lower than those paid by industrialists in most OECD countries.

Behind the continuing decline in the workers’ share of the national income is the weakening of their bargaining power vis-à-vis employers and the government, which is itself a large employer. The bargaining power of workers has become weaker first and foremost due to the decline in union membership. Following are a number of figures based on research and analysis of the Central Bureau of Statistics Social Survey.

· In Israel, the decline in union membership has been especially rapid: in 2000, 45% of workers were unionized. Six years later, in 2006, the percentage had declined to 34%, and approximately half of the workforce was covered by collective labor agreements. Six years later, in 2012, only 25% of workers were union members and only 30% were covered by collective labor agreements.

· High unionization rates can be found in the following industries: water and electricity (86%), education (52%), and public administration (46%). These sectors still remain primarily in public hands. In the private sector, unionization rates are much lower, between 5% and 13% in services, food services, trade and construction. In banking, insurance and financial services, about one-third of workers are unionized. The lowest unionization figures are to be found among contract workers, whose employment mode makes it almost impossible to unionize them.

· High unionization rates are characteristic of academic occupations – 42.3%, and professional and technical occupations, including teachers – 34.1%. High unionization rates also characterize highly educated full-time workers receiving high pay. This can be seen as evidence of the connection between unionization and good jobs and high salaries; the other side of the coin is, of course, the difficulty of organizing workers at the bottom of the salary scale.

In recent years, since about 2008, Israel has witnessed a new wave of unionization. This is the result of the emergence of a new labor union – Koah LaOvdim – and of new unionization initiatives on the part of the General Histadrut and the National Histadrut. This may signal a change in the two-decade old trend of declining unionization, especially in the private sector.

Below are additional findings from the report:

· About 150,000 workers set up workers’ committees and joined unions, most of them in 2013 and 2014.

New unionization efforts occurred in the following sectors:

· In the private sector – in the areas of telecommunications, media, insurance and transportation;

· Among young people employed in fast food industries;

· Among contracted workers and non-governmental providers of social services;

· Among education workers, college lecturers and alternative medicine practitioners.

It should be noted that anti-unionism is the norm among employers, who use a variety of means to hamper unionization initiatives, among others, delaying tactics in negotiations with workers, fragmentation of the bargaining unit to make organization harder, and harassment of leaders. Steve Adler, past president of the National Labor Court, noted that “in Israel as in the United States there has emerged an industry of experts in frustrating unionization efforts.”

הפוסט Workers, Employers and the Distribution of Israel’s National Income – Labor Report 2014 הופיע לראשונה ב-Adva Center.

At the same time, employees’ share in the national income remained at its 2009 level – 63% — which is still significantly smaller than it was at the beginning of the previous decade – 69%. The share of employers stayed at its 2010 level – 13% — significantly higher than it was at the beginning of the previous decade – 8-9%.

Even if the percentage differences are small, the sums are significant. In 2011, for example, Israel’s national income amounted to NIS 735 billion, one per cent of which was NIS 7.35 billion. Had the employees’ share of the national income in 2011 been 69%, as it was in 2001, employees would have received the combined total of an additional NIS 44.1 billion. If we divide this sum by the total number of employees in 2010, approximately 3.204 million (excluding migrant workers from abroad) – we find that in 2011 each employee would have received on average an additional NIS 13,763 per annum, or NIS 1,147 per month.

In sum, the years 2001-2011 were more beneficial to employers than to employees. The national income grew by 35%, but while the share of employees rose by 23%, the share of employers rose by 85%.

Persons in the top percentile received a growing share of the national income. This is evident from the figures published by two different sources.

6. According to the figures of the Central Bureau of Statistics on employed persons, the top percentile of employees held 6.8% of the total income of salaried persons in Israel – the highest percentage recorded for the decade.
7. According to the figures of the State Revenues Authority, the top percentile of both salaried and self-employed persons held 14.1% of all gross income in Israel in 2010 – an increase of 34% between 2005 and 2010. This figure positions Israel close to the top of those countries in which persons in the top percentile are very wealthy (See the following table).

Senior executives are one constituent of the top percentile.  The salary costs of executive directors of the 25 largest corporations on the Israeli Stock Exchange in 2011 amounted to NIS 9.8 million, on average, including NIS 3.0 million in salary, NIS 2.8 million in bonuses, and NIS 4.2 million in stock shares.

The picture that emerges from the foregoing figures shows an increasing concentration of wealth in the hands of a minority. It also shows the weakening of the bargaining power of most employees in Israel. The result is that the labor market fails to deliver a decent wage to a good portion of its employees. The profits of the minority today are liable to turn out as a future loss for the Israeli economy and society, for employees who do not manage to maintain a decent standard of living, including a good education for their children, do not constitute a strong basis for long-term economic development.

Attached is a table of international comparisons of the share of the national income going to persons in the top percentile.

Share of the Top Percentile in the National Income Circa 1949 and 2005,

Selected Countries, By Descending Order in 2005

Sources:

Israel: State Revenues Authority, Ministry of Finance, Annual Report, various years.

Other countries: Atkinson, A., Piketty, T. and Saez, E., “Top Incomes in the Long Run of History,” Journal of Economic Literature, 2011, 49/1:3-71.

For the Full Report in Hebrew Click Here

הפוסט Workers, Employers and the Distribution of National Income 2011 הופיע לראשונה ב-Adva Center.

The share of employees in the national income also increased slightly, from 62% in 2009 to 63% in 2010. Still, the share of employees is much smaller than it was at the beginning of the decade: 68%. The share of employers in 2010 was the same as in 2009 – 14%.

Even if the percentage differences are small, the sums are significant. In 2010, for example, Israel’s national income amounted to NIS 688 billion, one per cent of which was NIS 6.88 billion. Had the employers’ share of the national income in 2010 been 68%, as it was in 2000, employees would have received the combined total of an additional NIS 34.41 billion. If we divide this sum by the total number of employees in 2010, approximately 2.938 million (excluding migrant workers from abroad) – we find that in 2010 each employee would have received an additional NIS 11,713 per annum, or NIS 976 per month.

In sum, the past decade was better for employers than it was for employees: between 2000 and 2010, the national income grew by 33%; the share of employees grew by 24% and the share of employers by 44%.

According to Central Bureau of Statistics (CBS) figures, the top percentile (top 1%) received 6.3% of the total earnings of employed persons in Israel. The State Revenues Authority (SRA) set the figure at 8.7%. The SRA also calculated that the top percentile of both self-employed persons and persons employed by others received 12.8% of the total national income.

In contrast, according to the CBS, employed persons earning up to two-thirds of the median income – defined as low income – – constituted in 2009 25.9% of all employed persons. Their share of the national income amounted to 7.7% – only slightly more than that of persons in the top percentile.

The picture that emerges from the foregoing figures is one of concentration of income in the hands of a minority – heads of conglomerations, high-level corporate executives and well-paid employees working in two or three sectors of the economy. At the same time one sees the weakening of the bargaining power of the majority of employees. As a result, the Israeli labor market does not provide a living wage to a large part of its workers. The huge profits reaped today by conglomerate heads are liable to turn into future losses for the Israeli economy and for Israeli society. Employees who find it difficult to maintain a decent standard of living and to provide their children with a good education are not a strong basis for long-term economic development.

הפוסט Workers, Employers and the Distribution of Israel’s National Income Labor Report: 2010 הופיע לראשונה ב-Adva Center.

In 2009, employers’ share of the national income rose, while the share of employees decreased. The employers share increased from 15% in 2008 to 17% in 2009, and the employees’ share decreased, from 62% to 60%. In other words, the blunt of the global financial crisis of 2008-2009 hit employees, not employers.

From a 10-year perspective (2000-2009), it appears that the last decade was good for employers. While it is true that between 2000 and 2002, employers’ share of the national income decreased from 14% to 10%, by 2004 that share had returned to its former level. After that it continued to increase, to 17% in 2009.

For employees, the decade was not beneficial: in 2000, their share of the national income was 66%; by 2009 it had declined to 60%.

While the difference in percentage points is not great, the actual sums are quite significant. In 2009, Israel’s national income amounted to NIS 654 billion. One percent of this was NIS 6.54 billion. Had the employees’ share of the national income in 2009 been 66%, as it was in 2000, and not 60%, employees would have received, as a group, NIS 39.2 billion more in wages. If we divide this sum by the number of salaried persons in 2009 – 3.014 million (including migrant workers) – we find that, on average, each employee would have received an additional NIS 13,000 a year, or NIS 1,083 a month.

Another indicator of the growing income inequality in Israel is the difference between the increase in national income and the increase in the share of employers and employees. Between 2000 and 2009, the national income grew by 30%; while the share of employees grew by only 17%, the share of employers grew by 59%.

· Over the last decade, the net domestic product per work hour increased by 7.3% in the business sector and by 7.5% in the economy as a whole. In contrast, the compensation per work hour declined by 7.8% in the business sector as well as in the economy as a whole. In 2009, this decline was notable: while the net domestic product per work hour rose by 2.9% in the economy as a whole and by 2.6% in the business sector, the compensation per work hour declined by 5%, both in the business sector and in the economy at large.

· In 2009, the salaries of directors-general in companies listed on the Stock Exchange rose by approximately 9% to NIS 2.54 million per year, or NIS 212,000 per month. This is a significant increase since 2008, and it is worth mentioning in view of the fact that it occurred in the midst of a world financial crisis. The growth in the compensation of senior managers is the most significant change in Israel in the area of salaries, and it is especially salient against the background of the fact that the average wage per employee job in Israel declined between 2000 and 2009 by 4% in real terms. In 2009, while the salaries of director-generals rose by 9% in real terms, the wage per employee job declined by approximately 3% in real terms.

הפוסט Workers, Employers and the Distribution of Israel’s National Income Labor Report: 2009 הופיע לראשונה ב-Adva Center.