Meet the Startup Nation's Second-class Citizens – Women

A new study has found that women working in high-tech in Israel are earning as much as 45% less than their male colleagues.

Young employees working at a high-tech company.
Bloomberg

The Israeli high-tech industry is good to its employees. Salaries are high, the opportunities for advancement – both at home and overseas – are excellent, and employees enjoy relatively good job security. And opportunities in high-tech are supposedly open to all, as long as they have the talent and professional know-how.

But even in Israel’s Startup Nation, women are second-class citizens. New data from the Economy Ministry’s Equal Opportunity Employment Commission show a 45% wage gap between men and women in high-tech, whether it’s full-time employees or hourly workers. And that’s in a country where the gender wage gap in the economy as a whole is 32%. The commission came to the worrying conclusion that long-term employment in the high-tech sector is not financially worthwhile for women.

Commission staff say they took a look at the high-tech gender wage gap because employment in the sector is considered high quality from the standpoint of productivity and the ability to maximize earning potential. Actually, though, it is this sector – which has a reputation for paying its employees well – where the gender gap is the highest.

The commission’s analysis, based on newly available data from the Central Bureau of Statistics (dating from 2013), shows that men in the high-tech sector earned an average gross salary of 15,800 shekels per month (about $4,140), compared with an average of 8,771 shekels (about $2,300) for women. Also surprising is that the average high-tech salary for women is not much higher than the average for women in general (7,280 shekels). Yet male high-tech employees in 2013 earned a lot more than the 10,683-shekel average that men in the general workforce made.

One reservation with respect to the data is that they relate to all high-tech sector workers – from programmers and engineers, whose salaries are higher than the average for the Israeli workforce as a whole, to administrative and sales-support staff. In core technology positions, men predominate. Only about a fifth of research and development professionals in Israel are female, while overall in the sector, the statistics bureau says about a third of employees are women.

What’s the bottom line of the commission’s findings? “While the high-tech industry pays for male salaried employees, both with respect to the level of their hourly and monthly salaries and with respect to their ability to save for their pensions, for women, high-tech employment almost doesn’t pay financially, because it leaves them at salary and pension contribution levels that are similar to other wage earners in the country,” is its damning conclusion.

Substantial gap in hourly rates

One of the claims that is sometimes even made by women is that they earn less because they work fewer hours – leaving earlier, for example, to pick up the kids. Consequently, the equal opportunity commission looked at compensation on a per-hour basis, yet still found a substantial gap between the genders. Men earned an average of 79 shekels an hour before taxes, while women made 50 shekels – a 36.7% disparity. Among the Israeli working population as a whole, the hourly disparity is 14.5%.

“I work convenient hours, and am usually at the office fewer hours than the men I work with,” says Keren, an experienced programmer at a major multinational firm. She earns about 26,000 shekels a month. “I find reasons to explain to myself why I am staying, even though I’ve been burned out for a long time. I have a great boss and I love my friends at work,” she says.

Nevertheless, as a graduate of the Technion – Israel Institute of Technology, Haifa, and with 15 years’ professional experience, she’s prepared to settle for less pay compared to other places where she could work – given her experience and ability – in order to give her that balance between career and raising her three children as a divorced mother.

“When I started at the company four years ago, I was getting 24,000 shekels,” she recalls. “I remember that I tried to ask for more, which they wouldn’t agree to give me, but I took the job anyway. I won’t switch jobs for more money, because it’s not important enough for me. It’s very hard to make the transition.”

Wage discrimination between men and women spawns long-term cumulative discrimination, which also affects women when they leave the job market. An analysis of 2013 pension contribution data, from the Central Bureau of Statistics, found that pension contribution disparities were even greater than wage disparities. This may be because the amount paid into pension plans in the high-tech sector can sometimes be a case of negotiating with the employer.

A degree of concern

The greatest gender wage gap in Israel – 39% – is among people in jobs that require a higher education degree, including engineers and computer scientists, who are the core of the high-tech workforce. Among senior management in jobs in Israel in general, the wage disparities are lower but still substantial, at 25%.

The picture is even more dismal when data published in the most recent issue of TheMarker Women magazine are added to the mix. That information, based on a comprehensive salary survey conducted in cooperation with the Ethosia Human Resources high-tech and biotech placement firm, found that women are a minority in the high-tech workforce in every type of operational position in 2015. And at every managerial level, women earn substantially less than their male counterparts in the same job at companies of every size and every industry subspecialty.

The survey found a high-tech gender wage gap of around 12% at every level. For example, female high-tech CEOs earn an average of 38,000 shekels a month, while their male counterparts earn 43,000 shekels on average (a 11.6% difference). The disparity is even larger in mid-level positions, where men with five to nine years’ experience earn an average of 21,000 shekels a month while women make 17,000 (a 19% difference). The gap shrinks when it comes to mid-level administrative jobs such as team leader, senior manager and vice CEO, but it is still in the double digits. And the further up the ladder one advances, the fewer women there are as a rule.

“High-tech is demanding when it comes to hours at work and doesn’t leave you the possibility of raising children, so these positions have taken on a male character. It’s there that the competition between men and women is unfair,” says Eyal Solomon, Ethosia’s CEO, in reaction to the survey results. “You see it in the case of Yahoo! CEO Marissa Mayer. Everyone was up in arms over the short maternity leave she took and judged her for it,” he said, referring to the U.S. high-tech executive’s two-week leave before returning to work in 2012.

Problem starts with education

The problem begins even before women enter the workforce. The number of women choosing to study science and engineering in anticipation of a high-tech career is low. Female students are in the minority in university engineering departments. And a survey by the Samuel Neaman Institute for National Policy Research conducted a few years ago found that the number of women employed in R&D positions – the heart of technological development – is considerably lower than the percentage of women who get degrees in science and engineering.

And then there’s the problem of salary confidentiality and women who don’t know how much their male counterparts are earning. Take the example of Michal Michaeli, who began her professional career in the late 1990s. She was quickly promoted at Comverse, a promotion that included a 30% raise. But she then asked her male colleagues how much they were earning and discovered that at 9,000 shekels per month, she was making half what they were – and the men were getting stock options. In recent years, Michaeli began working in the field of female entrepreneurship, establishing Eva Ventures – a venture capital fund investing in female startups.

Programmer Keren believes women are also hampered by their inability to talk openly about salaries. “It’s a taboo,” she says. “I’m the only woman in my group, and I’m sure I earn less than all the men working with me.”