Movin' on Up

So Bank Leumi is 'the whites' bank'? Don't worry about it, says Momi Dahan, a former Bank of Israel chief economist. Non-Ashkenazi Jews have made enormous strides in recent decades.

sharon shpurer
Sharon Shpurer
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sharon shpurer
Sharon Shpurer

Tens-of-thousands of words, thousands of Internet comments and enumerable conversations have been devoted to Shlomo Maoz's "white man's speech" last week - the lecture where investment house Excellence Nessuah's chief economist called Bank Leumi "the whites' bank."

Two issues have been in focus. First, was Excellence justified in firing Maoz for his remarks, or was this illegitimate censorship? Second, what about the fact that Maoz himself is not exactly deprived but rather a longtime collaborator with tycoons of all colors? He's a member of 15 different boards of directors and earns NIS 200,000 a month, by conservative estimates.

Credit: Ayala Tal

Few people have addressed the main points of the speech, which took place at Sapir College. Maoz was hard-hitting, referring to "the ruling white society" and "the robber kibbutzim." He said he'd like to see "someone bash the heads of the Ashkenazim on Rothschild Boulevard." Maoz didn't provide any data to back up his allegations.

But a new study, to be published this year, maps the ethnic component of each of the economic deciles of Israel's population. It was the widening gaps between them that propelled last summer's social protest. As of 2010, almost half (47 percent ) of the upper two deciles - the only people who end each month in the black - are Israeli-born non-Haredi Ashkenazim with fathers born in Europe or the United States. Yet Ashkenazim constitute only 25 percent of the general population.

Only 26 percent of the people in the highest decile are Mizrahim - Jews of Middle Eastern or North African descent - and this is also their exact proportion of the population.

In the lowest decile only 6 percent are non-Haredi Ashkenazim, while 12 percent are Mizrahim. Nearly half of this decile - 48 percent - are Arabs, while Haredim of all ethnic groups account for 19 percent (most of the remainder are new immigrants of different backgrounds). The average per capita income of Mizrahim is 20 percent lower than that of Ashkenazim.

The study was initiated by Prof. Momi Dahan, a former director general of the Finance Ministry and former chief economist of the Bank of Israel. Dahan also investigated socioeconomic gaps a decade ago and concluded that they had widened. But this time he's actually optimistic.

"I had the feeling that Maoz's speech was motivated more by personal distress than by observation - meaning a dispassionate, thorough analysis," Dahan told Haaretz in an interview. "You don't use the word 'robber' in a dispassionate analysis."

Before we get into the data from the study, what are the criteria for distinguishing between Mizrahim and Ashkenazim?

"First, it's important for me to say that I find the word 'Sephardi' more accurate than 'Mizrahi.'"

In what way?

"If you ask people, you'll find that the word 'Sephardim' has a more respectable connotation. Of course, that's a matter of feeling. Overall, it's important to understand that there's no single figure that can reflect the proportion of Ashkenazim or Sephardim in the population. It depends on the definition. Are a person's origins defined according to his parents or according to their parents? And so on.

"In my study regarding income, 'Ashkenazi' and 'Sephardi' are determined according to birth in the relevant countries, or the father's birth there. I don't think this factor causes a significant statistical bias; what's important is to use the same definition over time.

"The immigration waves from Russia also influenced the data and made the segmentation more complex, because, for example, you now have the question of how to define a Russian. When we listen to Maoz talk about Russians, we might think for a moment that David Ben-Gurion, who is universally considered an Ashkenazi, was a Russian, because even though he immigrated from a town in Poland, that country was part of the Russian empire at the time.

"At the same time, in the second generation, which is represented in the study and defined as either Jew or other, who was born in Israel, and whose father was too - excluding Arabs and the ultra-Orthodox - I estimate that the share of Ashkenazim is greater. That's because the Ashkenazim have been in the country longer, and it was they who absorbed the Sephardim. If I look at Mazkeret Batya, where I live, which was established by the Biluim [Jews from the Russian Empire who arrived in Palestine in 1882], the majority is already part of the second generation. In contrast, my children are Israeli-born but their father is not, so they will not be included in the second-generation category."

Looking at your study, maybe we can better understand what Maoz meant?

"When I look at the findings, I conclude that all told, the 'ingathering of the exiles' was an extraordinary success in terms of narrowing the gap, given the ethnic rift between Mizrahim and Ashkenazim. My argument is not that the gap has been closed - there's still an income and education gap between Ashkenazim and Mizrahim. But the trends are very encouraging.

"When I examined the subject a decade ago, I discovered that the education gaps had widened. I examined the proportion of high-school students entitled to a matriculation certificate and found that in the second generation the disparities had become greater. That was the reason for my pessimism.

"At present, I find a significant reduction in the education gap, regardless of the generation. The proportion of Mizrahim attending institutions of higher learning increased from 1.6 percent in the mid-1960s to 12.5 percent in 2005, when the last census was conducted. There is a gap - the proportion of Ashkenazim attending institutions of higher learning today is 20.2 percent, almost twice what it was in the 1960s. But the gap is constantly narrowing. I call it a Mizrahi breakthrough in education."

But even today, Mizrahim earn less than Ashkenazim.

"That's true. But there has been a very dramatic development in income. This, too, amounts to a Mizrahi breakthrough. I thought people wouldn't believe this part of the findings. I thought they'd say I had made up the numbers. But in fact my research assistant, who's in charge of the data, is an Ashkenazi," Dahan says, laughing.

"You see it vividly in the upper decile. The proportion of Mizrahim in this group has caught up with its percentage in the population and stands at 26 percent. It was not always so. In 1979, when Mizrahim constituted 45 percent of the population [before the Soviet immigration wave of the 1990s], they were only 18 percent of the upper decile. In 1999, when they constituted 32 percent of the population, their proportion in the upper decile was 23 percent.

"One development shown by the data is the emergence of a Mizrahi upper middle class. That explains various phenomena, such as the popularity of Mizrahi music. Why has that music flourished in recent years? An economic phenomenon made it possible. By the way, the situation with the Arabs is the opposite: Most of them are in the lower class, and the slide is very steep."

Are you saying the Mizrahim gained at the expense of the Arabs?

"That's how it goes. It's a zero-sum game. It's always at the expense of someone."

Maybe you're overoptimistic. Maoz described Bank Leumi as "the whites' bank." These days, board directors or managers are not asked about their ethnic background, so there's no research on this. But looking at the board members and managers at Leumi, and at other big corporations, it seems Ashkenazim far outnumber Mizrahim. And we can also assume that the directors come from the middle and high deciles.

"I'll answer that from a different angle. If we know that the proportion of women at the undergraduate level is very high, but lower at the master's level and still lower at the doctorate level, we can take that as troubling data. But we also understand that those who are now studying for an undergraduate degree are the same people who will go on to higher degrees in the future. After all, one doesn't jump straight to a doctorate.

"It's the same with directors. There's no magic in economics - things take time. Directors are generally in their 50s to their 70s. They're not 18. So now we're seeing gaps, but I'm sure that with time we'll see more Mizrahim on boards of directors.

"You can view the glass as half-empty, but I prefer to see it as half-full. And I know, by the way, that I won't come out of this discussion well. It's impossible to come out of a discussion like this unscathed, because emotions run very high. It's not always rational. I'm sure some people commenting on the Internet will say, 'Momi Dahan has gone Ashkenazi.' But the numbers are very encouraging - not just in income and education but also in other long-term trends and changes."

What kind of changes?

"There has been a sharp rise in mixed marriages in the past few decades. A study by Barbara Okun based on 1995 data showed that whereas the percentage of children of mixed parentage - with a Mizrahi father and an Ashkenazi mother, or vice versa - among 40-year-olds was only 5 percent, among 10-year-olds, the percentage stood at 25 percent. I'm now examining more up-to-date statistics and I expect to find that the percentage has grown. This is a phenomenon unique to Israel, one that's almost nonexistent in the migration culture - in countries like the United States or Australia, for example. In sociological terms, it's an astonishing increase.

"Another area where we see a dramatic change is the birthrate. After a very short time in historical terms - a few decades - the number of children born to a Mizrahi woman now equals that of a native-born Israeli whose parents arrived from Europe. In fact, it's even a bit lower, but I won't get petty. If in the 1950s a Mizrahi woman gave birth to five children on average, compared with 2.5 children for an Ashkenazi mother, the current figures are 2.8 for a Mizrahi woman and around three for an Ashkenazi woman."

What's the importance of the number of children?

"The importance lies in two realms. The first is technical: If the number of children decreases, even if you do nothing, per capita income rises, because it's the same household income but there are fewer people. Another interesting dimension is the 'melting pot.' Populations in certain areas are resembling one another more. The song 'Children Mean Happiness' was about families with a large number of children, against the background of the Mizrahim-Ashkenazim gaps. Those gaps have narrowed, and it has happened faster than people expected."

So everything is hunky-dory and we're on the way to eliminating the gaps, and there's no difference between Mizrahim and Ashkenazim?

"I'm not a psychologist, but an economist, so what interests me is whether the melting pot concept succeeded. The data, as I said, are very encouraging, but this also has to do with personal feelings. Just because the disparities in education and income are decreasing, that doesn't necessarily translate into a narrowing of the social gaps. For example, does a distinctly Mizrahi name convey inferiority, or does the music that is identified with the oriental communities possess an status inferior to that of Western music? From that standpoint, there could still be a very large gap, which might rile some people, even though objectively the gap is narrowing."

Do you personally feel the gap?

"I chose deliberately to keep the name Momi Dahan so that a Mizrahi kid who sees me on television will know that Momi is not necessarily the name of a longshoreman or a garage worker, but also the name of an academic - and the same goes for Dahan.

"It's not just the name; other things upset me. For example, on a satirical program like 'A Wonderful Country,' the Mizrahi is generally portrayed as inferior. He'll be loudmouthed or crass, inarticulate and have a low-status occupation. But the professor, say, will generally possess traits that are identified with Ashkenazim.

"These characters reflect society's attitude toward Mizrahim. Look at the character of Lital Maatok, who is played by Mariano Edelman. She's a disturbed girl, with Mizrahi traits. When the program was criticized for this, they gave her Ashkenazi parents who are academics.

"It's also discernible in Mizrahi music. If you translate the songs played on Galgalatz [Army Radio's music station], you'll find they're just as ridiculous, and maybe even more so, than the Mizrahi songs that are being lambasted. And it's not that I'm a fan of ridiculous Mizrahi songs. But I'm getting personal, and I don't want to do that."

Getting personal seems to be unavoidable in a discussion like this.

"But I don't want to fall short of my major goal."

Which is?

"My goal is to present a factual picture things as they are. Overall, the situation reflects great success in two areas: the success of Mizrahim in bursting ahead, and the Zionist movement's success in achieving a true ingathering of the exiles. I believe that after the objective disparity narrows, the social disparity will also narrow, even though that takes much more time.

"The fact that such a large proportion of people are being born in mixed-origin families is the most salient proof of the success of the ingathering of the exiles. That also has far-reaching implications in the cultural-identity sphere, because mixed-origin children have to adopt an Israeli identity. In fact, I think most Mizrahim in Israel and most Ashkenazim will categorize themselves as Israelis first. That's the greatest victory."

What do you think accounts for these achievements?

"I didn't examine that, so this is just conjecture, but I think that the more the Israeli economy is based on a market economy and less on the government and the Histadrut labor federation, the easier it will be for the Mizrahim to integrate according to their skills.

"If in the 1950s and '60s, the government was very dominant, connections naturally carried greater weight and the people in key positions, the builders of the country, were mostly of European descent, today the government and the Histadrut have receded and the market economy has leaped ahead. That has made it possible for the Mizrahi community to leap ahead, in both education and income.

"Still, it's all very confusing, because along with the major success in reducing the ethnic gap, the socioeconomic gap has widened, and the economic disparities have increased greatly."