Public sector employees far outearn the average Israeli, according to the Finance Ministry salary report for 2017, released Monday. The data include about half of public sector employees and do not reflect the most recent wage hikes for state employees.
Government ministry salaries increased 21% over the past decade. In the health sector, wages rose 31%. In comparison, overall wages in Israel increased an average of 11% over 10 years.
Immediately after the April election, the Finance Ministry and the Histadrut Labor Federation are due to begin negotiating on a new five-year collective bargaining agreement for the public sector.
Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon have presented higher salaries in Israel as a whole as their accomplishment, but in practice they reflect a decision to go along with public sector employees’ demands and a desire to avoid paying the political price of strikes and conflicts with trade untions. Netanyahu, after all, remembers the political price he paid in 2006, when Likud shrank to 12 Knesset seats in the wake of his budget cuts as finance minister in 2003, during a recession and the second intifada.
Large groups of government employees earn less than the national average.
The report includes employees of government ministries, government hospitals, the education sector and parts of the defense establishment.
Average real wages in the public sector rose 25% in the past decade, in part as a result of collective bargaining agreements. Government workers are represented by the Histadrut. In nominal terms, government wages increased 41% over a decade, while wages in Israel overall rose only 25%.
Government employees enjoy greater job security and shorter work hours than the private-sector average, as well as more vacation days and sick days. They also receive automatic raises, and their pension is calculated on most components of their salary, which is often not true in the private sector.
The state spent 178 billion shekels on salary costs in 2017 — about half of the national budget. This figure includes pensions as well as salaries for workers who are not employed directly by the state, such as some teachers.
In the field of education, only 44% of employees have full-time positions, while in health care that figure is 67% — a factor that affects wages in these areas.
In government ministries and in the defense sector, by comparison, 95% to 99% of employees have full-time positions.
While the gender wage gap is shrinking, it remains high: Men outearn women by 15% in government ministries, by 28% in the health care sector, 21% in defense and 9% in education.
According to Central Bureau of Statistics data, men outearn women by 31% in Israel as a whole.
However, since public sector salaries are set by collective bargaining agreements, the question remains as to why there’s any discrepancy at all.
The report indicates that the differences between men and women’s salaries is due to the number of women and men at different salary steps, as well as whether they are employed full-time and overtime pay. Women work more hours within the office than men do, and take more sick leave — primarily to care for sick children.
In addition, women work an average of 10 hours of overtime a month, compared to 17 for men. This means men receive an average of 2,000 shekels ($550) a month in overtime pay, compared to 1,500 shekels for women.
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In addition, the higher-salary jobs still tend to be filled by men. For instance, some 60% of jobs considered on par with judges for salary purposes are filled by men. However, in the much lower typist salary category, the overwhelming majority of workers are women. In addition, only 11% of ministry directors generals covered in the report are women.
However, the public sector seems to be better at advancing women than the private sector; 46% of senior public sector jobs are held by women, versus 36% in Israel at large. However, Israel is still undershooting its goal; the overwhelming majority of ministries have fewer high ranking women than slated.
Overall, Israel ranks a respectable eighth in the Organization for Economic Cooperation and Development in terms of the number of senior government employees who are female.
The report finds that the top public sector wage earners are in the health sector, at an average of 18,633 shekels a month. An average government ministry employee earns 16,301 shekels a month, a bit less than the average defense sector employee, who earns 16,934 shekels a month. The average education sector salary is 13,233 shekels a month.
Health sector salaries have been increasing faster than average Israeli salaries, due to the pace of increase in doctor salaries, which are high in any case. Physicians far outrank other public sector employees in terms of their pay per hour. Doctors earn an average of 37,200 shekels a month, compared to an average of 18,700 shekels a month for nurses. At the bottom are social workers, earning 8,400 shekels a month.
Doctors’ wages increased 59% in nominal terms between 2008 and 2017, and 42% in real terms.
On the other end of the scale are teachers. Beginning teachers with bachelor’s degrees earn 6,970 shekels a month; those with seniority can earn as much as 15,000 shekels a month. Some 60% of teachers have bachelor’s degrees. Israel has some 170,000 teachers, and the report covers 130,000 of them.
The average education sector salary was 13,223 shekels a month for full-time work. While that figure is nearly 30% above the average Israeli salary, it does not represent the conditions of average teachers because it is skewed by the salaries of principals, who represent only 2% of education sector employees and earn an average of 22,882 shekels a month; and by vice principals, who represent another 2% of employees. Furthermore, only 44% of teachers work full-time.
All told, the average education sector salary for full-time work is 30% less than the government salary average.
The highest-paid ministry employees are those on par with judges, who earn 55,000 shekels a month; employees with seniority can earn as much as 73,000 shekels a month. Legal advisors on special contracts can earn as much as 42,000 shekels a month, or 50,000 shekels with seniority.
Ministry directors general earn 40,000 shekels a month.
At the bottom are the judges’ typists, earning 10,000 shekels a month.
In addition, public sector employees enjoy unusual job security. Only 0.9% are dismissed every year, and the median employee seniority in the public sector as a whole is 11 years, a figure considerably higher than for the Israeli economy as a whole, where the median worker seniority is five years.
Over the previous five years, the number of public sector positions increased by 1.4% annually, compared to Israel’s population growth of 1.9%.
While the Israeli norm is for a nine-hour workday, five days a week, in the public service the norm is 8.5 hours, which means that public-sector employees work 150 hours less per year than private sector workers. State employees also receive 22 vacation days a year, compared to the minimum of 12 days a year required by law.
Lior Dattel and Sami Peretz contributed to this report.
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