Report: Israel's Middle Class Lives Like the West's Working Class

Left-leaning think tank Adva Center finds that the image of suburban family with two cars is far from reality.

1. The middle class is a myth

Calling themselves the champions of Israel's middle class, Yair Lapid and members of his Yesh Atid party jumped on the social protest bandwagon and rode it to victory in last week's election. In a speech last month at Sapir College in Sderot, Lapid likened the middle class to a workhorse and stridently proclaimed that it's time the horse stopped carrying the entire country on its back. "The workhorse - that's me - won't let it happen," he declared. "Someone needs to truly protect Israel's middle class."

But when the votes granting Lapid 19 seats were counted, it turned out that the majority of them hadn’t come from the middle class, but from the upper classes. Lapid won big in most of Israel's affluent towns, like Caesarea, Ramat Hasharon, Kfar Shmaryahu and Savyon.

A new report from the Adva Center titled "The State of the Middle Stratum in Israel," written by Noga Dagan-Buzaglo and Etty Konor-Attias explains that the country's actual middle class is quite different - much less bourgeois - than the image prevailing in Western literature and mass media.

2. Average income is NIS 9,700 to NIS 16,300 per month

"In many ways the middle stratum in Israel resembles sociological characteristics attributed in the West to the working class," says the report. "The Israeli equivalent of the middle class found in Western countries appears higher up on Israel's income scale."

The report statistically defines the "middle stratum" as households with gross income between 75 and 125 percent of the median income - NIS 13,000 a month in 2010, according to the most recent Central Bureau of Statistics data - or between NIS 9,700 and NIS 16,300.

"The level of Israeli middle class income is lower than generally thought," says Dagan-Buzaglo. "These aren't suburban families with two cars and a nice house. There's a huge gap between the image and the reality. Working no longer provides protection from poverty and doesn't ensure a dignified livelihood. When Lapid talked about the middle class, he was in essence referring to the upper class."

3. Wealth is moving to the poles

Like previous research, the Adva study clearly shows that the middle class in Israel shrunk between 1992 and 2010, which means social gaps have widened. According to Adva, the middle stratum decreased over this period from 30.8 percent to just 27.8 percent of all households, while the lower stratum increased from 32.6 percent to 34.4 percent and the upper stratum increased from 36.5 percent to 37.8 percent.

"These figures attest to a process of polarization: The middle is shrinking and the edges are growing," says Dagan-Buzaglo. "This probably stems from a decrease in the number of organized workers in the public sector, who made up a large chunk of the middle class, and an increase that's taken hold in the number of sales and services personnel working at low wages. During this period the high-tech and financial sectors also grew stronger, which contributed to an expansion of the upper stratum."

4. Development towns are middle class

In 2010 the largest proportion of households in the middle stratum - 35.2 percent - was actually found in development towns, according to the report. In contrast, just 28.2 percent of middle stratum households were found in the "Forum of 15," a group of established cities that don't receive government grants. These cities include Tel Aviv, Ramat Gan, Ra'anana, Kfar Sava, Ashdod and Be'er Sheva. Another 24.9 percent of the middle class lived in Arab municipalities.

Most of Israel's middle class isn't highly educated. Only 27 percent of middle class households have a member with a college degree while 42 percent have one with a high school diploma.

Another characteristic of the middle stratum is that men aren’t the primary breadwinners in terms of working hours. The lower classes have a higher proportion of women as the main source of income, probably due to a preponderance of single-parent households, while in the upper strata men tend to provide the majority of household income.

"The fact that women often work more hours than their spouses doesn't necessarily mean they earn more," says Dagan-Buzaglo. The researchers also point out that in 2010 - in contrast to in 1992 - most households need more that one breadwinner to remain in the middle stratum.

Meanwhile, the dream of owning a home has become more remote. In 1992 76 percent of those in the fifth decile - the lower end of the middle stratum - owned their own homes, but by 2010, the figure had dropped to just 66 percent.

5. Ashkenazim are still privileged, Arabs disadvantaged

The Adva report points to the narrowing of income gaps based on ethnic background but not those based on national background. In other words, groups like Israeli-born Mizrahim and immigrants from the former Soviet Union have seen strong improvements in their economic statuses, but the situation for Israel's Arab population has only gotten worse. Whereas 56 percent of Arab-led households were in the lower stratum in 1992, by 2010 this figure had climbed to 64 percent, according to the study.

In contrast, fully 27.2 percent and 45.3 percent of households headed by former Soviet immigrants and Israeli-born Mizrahim were in the upper strata in 2010, a sharp improvement from the 10.6 percent and 24.9 percent respectively in this category in 1992.

"The Arab population became poorer over the past two decades," says Dagan-Buzaglo. "While more Arabs joined the workforce, most are still employed at very low wages and are entrenched at the bottom of the labor market, even if they have an education. Their representation in management positions is extremely low.

"The opposite is true for second-generation Mizrahim and immigrants from the former Soviet republics from the 1990s and later," she continued. "These groups integrated themselves well in the leading industries and well-paid jobs."   

Israeli-born Ashkenazim still have the highest probability of belonging to the upper economic classes - 35 percent of them do - while Israeli-born Mizrahim have a 20 percent chance. Former Soviet immigrants have the greatest probability - 20 percent - of being at the lower end of the upper class. Meanwhile Israeli Arabs have the greatest probability - 35 percent - of belonging to the lowest socio-economic level.

Eliyahu Hershkovitz
Haaretz