Report: Israel Has Two Middle Classes

The upper middle class is richer and younger, with fewer children and more breadwinners, a Taub Center study finds.

120,000 marching to 'social justice' protest in Tel Aviv, July 30, 2011 (Tal Cohen)
Tal Cohen

Israel's middle class, which took to the streets to demonstrate for social justice in the summer of 2011, is really two middle classes that are distinguished by income and other socioeconomic characteristics, the Taub Center for Social Policy Studies reported in a study released on Tuesday.

The study, written by economist Zoya Nisanov of Bar-Ilan University, said the average member of Israel's lower middle class has an income of between 1,950 and 5,000 shekels ($563 and $1,443) a month.

"The deliberate policy to strengthen the middle class must encourage participation in the labor force and offer employment opportunities, particularly amongst Haredi [ultra-Orthodox] men and Arab Israeli women," Nisanov said in the study. " At the same time, there is a need to provide appropriate training and enforce minimum wage laws in order to prevent a widening of the gaps between the upper middle and lower middle classes, as well as a lowering of the average standard of living within the middle class as a whole."

Lower-middle-class households tend to have one breadwinner and are more likely to be headed by women, the study found. Among such households, 59% have fewer than two full-time wage earners. Compared to the lower middle class, more of the households live in the Galilee or Negev and are headed by people born in the Middle East or North Africa.

On the other hand, second-generation Mizrahi Jews of Middle Eastern or North African heritage are more likely to be in the upper middle class — 25% versus 19.3% in the lower middle class.

The upper middle class enjoys a household income as high as 12,540 shekels a person a month, the study found. Only 15% of upper-middle-class households have fewer than two full-time breadwinners, and they have fewer children. They are also younger. The average age of the head of household is 45, three years less than for lower middle class households.

Two big segments of Israeli society — Arabs and Haredi Jews — are unlikely to belong to the middle class at all, the study said. Haredi households are 42% more likely than average to be in the lowest economic bracket. Israeli Arab households were 18% more likely.

The Taub Center found that while the average income for middle class households rose about 15% between 2003 and 2011, the gaps between the upper and lower middle class have widened. About 40% of Israelis belong to the lower middle class, and about 29% belong to the upper middle class, the study estimated.

Nisanov, who presented her findings on Tuesday at the Israel Economic Association conference in Tel Aviv, said child allowances have little effect on narrowing income gaps, at least for the years covered by the study. But she said old-age allowances have proved more effective.