Israeli Wages Rise for Fifth Straight Year, but Gender Gap Widens

Gap between Jews and Arabs remains wide, too, but showed some improvement in 2018

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File photo: Women in a course for nursery school teachers.
File photo: Women in a course for nursery school teachers.Credit: Tomer Appelbaum

Israeli wages grew for the fifth year in a row in 2018, but the pay gap between men and women and between Jews and Arabs remained high, figures released by the Central Bureau of Statistics on Monday showed.

Pay grew an average of 4% last year to a pre-tax average of 10,584 shekels ($3,050 at current exchange rates) a month. Median income – the mid-point between the highest and lowest incomes – was 7,988, a 6.3% increase over 2017. The average number of hours worked by Israelis every week was 40.9 and hourly pay stood at 61.70 shekels, a 4% increase.

However, the pay differential between men and women also grew last year. The average pay for a salaried male in Israel was 12,498 shekels a month, compared with 8,546 shekels for women, a difference of 31.6%, the CBS said. The median pay gap also widened between men and women to 27.5% from 24.7% in 2017.

Over the last three decades, women have closed some of the gap with men in wages. In the early 1990s, average pay for women was just 56-58% that of men. It climbed to 68% by 2013, but since than it has frozen.

Based on median earnings of full-time wage earners and self-employed, Israel had the fourth-widest gender pay gap among the 36 developed countries belonging to the Organization for Economic Cooperation and Development. In 2017 it was 21.8%, compared with an OECD average of 13.5%.

Part of the gap was due to the fact that women work on average fewer hours per month than men – a difference of 44.7 versus 39.6. When pay is calculated on an hourly basis, some of the gap is removed and the difference narrows to 16% – 66.30 shekels an hour for men and 55.70 for women.

Some economists also attribute the difference to parenting, with women typically taking on much more of the responsibility. However, an examination of the wage gap by age doesn’t entirely bear this out. At ages 15-24, when most women have not yet become mothers, the gender gap is the narrowest but it still exists. Measured by monthly pay it is 21.2%, although in hourly pay it narrows to just 2.5%.

But the widest gap is between workers over age 65, where the difference widens to 45.7% in monthly pay and 19.4% in hourly pay.

Women also tend to enter lower-paying professions. While overall they account for 48.4% of Israel’s salaried labor force, they account for more than 50% of the people employed in the four lowest-income professions, the CBS data showed.

By contrast, from the fifth income decile up, men account for more than 50% of earners in each decile. In the highest income decile, women accounted for only 24.5% of earners, down from 25.7% in 2017.

Moreover, at every level of schooling, the statistics bureau found that women earn less than men on an hourly basis, with the biggest gap existing among men and women with the most education: Men with 16 or more years of schooling earned an average hourly wage of 100.80 shekels, compared with 78.40 shekels for women with the same education, a difference of 22.3%, the CBS said.

Whatever the gender, wage earners in the highest decile in Israel earned 30.9 times what those in the lowest decile earned, on average.

Women stand in line at the employment office in Wadi Joz, East Jerusalem.Credit: Tali Meyer

The pay gaps are similarly wide between Israeli Jews and Arabs, the CBS found. The average gross monthly wage for Jews was 11,191 shekels, versus 7,338 for Arabs. Israeli Arabs earned on average just 65.6% of their Jewish counterparts’ income, although this marked a slight improvement over 2017’s 64.4%. On an hourly basis the difference was 65.60 shekels to 41.70 shekels.

The difference between Jewish and Arab males was wider than for Jewish and Arab women. For Jewish men, monthly average pay was 13,558 shekels in 2018, compared with 8,190 for an Arab male, a difference of 39.6%. That was an improvement over 2017 when the difference was 40.3%. In any case, on an hourly basis the difference was wider at 40.9%.

For women, the pay differential was a narrower 35.9%, with Jewish women earning an average of 8,923 shekels monthly and Arab women making 5,722. It narrowed from 37.4% in 2017. On an hourly basis was 32% in 2018 because Jewish women worked 2.4 hours on average more per week than Arab women.