Report: In Israel, Ashkenazis Earn 40 Percent More Than Sephardis

The number of Israelis receiving minimum wage or less grew by 22 percent in the past 10 years.

Ashkenazi Israelis earn around 40 percent more than their Sephardi counterparts, according to an annual report being released Sunday by the Adva Center for policy analysis.

The number of Israelis receiving minimum wage or less grew by 22 percent in the past 10 years - from 28.8 percent of workers in 1998 to 35.1 last year. The middle class also continued to shrink, from 33 percent of all households to 27.7 percent.

This is the tenth such report by the center, which analyzes social equality in Israel.

"The decade was marked by decreasing equality and justice in Israeli society," the document states.

"On one hand, the government boosted the business sector by transferring pension savings from public to private management, and through tax reductions to corporations and the rich," it said. "On the other hand, the government took steps to undermine some of the most basic socio-economic arrangements including the social safety net, the education system and the public health and housing systems."

The past decade saw significant economic growth, particularly in the last five years, but while growth in Israel was 40 percent for the period, in the United States it stood at 60 percent or even more.

Growth in Israel was centered in the banking sector, as well as insurance and pension funds, and the high-tech industry, which grew by 47 percent. Traditional industry grew just 6 percent over the entire decade.

A decade of growth

The profits of the decade's growth were not distributed equitably, the report stated. The monthly income of the second decile, for example, grew by NIS 570, while that of the sixth decile grew by NIS 1,486 and the top decile, NIS 5,522.

The report's authors noted that while a household in the second decile could use its additional monthly income to buy a few items of clothing, a household in the uppermost decile could use the extra income to pay for half of annual university tuition.

The report notes that one of the most significant expressions of income inequality is the reduction of the middle class. The share of total household income held by the three middle deciles shrank from 33 percent in 1988 to 27.7 percent last year. More than half of the households pushed out of those middle deciles - 57 percent - dropped to one of the lower deciles.

The government also contributed to income inequality in the past decade, the report stated, by cutting child programs, unemployment benefits and other social welfare services.

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