Report: Israel facing widening gaps

The Taub Center handed on Wednesday its State of the Nation Report: Society, Economy and Policy 2010 to Prime Minister Benjamin Netanyahu, Finance Minister Yuval Steinitz and other relevant government offices.

The annual report provides an overview of Israel's social and economic trajectories and offers policy proposals. The report's main theme is the issue of inequality, which is highlighted in most of the chapters of the 2010 report.

• Receive Ynetnews updates directly to your desktop
  

According to the report, gaps in income, education and health are widening, citing the level of education in Israel is a major cause of this phenomenon.

The report findings show that 40 years ago, over 90% of men with one to four years of education were employed, while today the rate is barely 50%. Furthermore, the employment rate for men with five to eight years of education does not exceed 60%.

Educated people are employed more and earn more. Consequently, as the report shows, their rates of poverty are lower, they have better access to health care and medications, and their children exhibit higher levels of educational achievement.

In light of the substantial and continuous decline in demand for unskilled workers, one might expect Israel’s government to act resolutely to reduce the supply of workers with low levels of education and skills.

But the government has done exactly the opposite: It permits hundreds of thousands of non-Israeli workers with low levels of education to enter the country at a rate that has led to one in every seven workers in the business sector who is not Israeli – thus preventing a recovery of employment and wages for Israelis with low levels of education.

Education will determine future

While the current macro-economic picture looks relatively good compared to other Western countries, who are recovering from the severe economic crisis, the long term prospects for Israel are quite problematic. The Taub Center shows that this is directly related to the level of education that a large and growing share of Israeli society receives.

The education that today's children are given will, to a large extent, determine the ability of future Israel to maintain a first world economy.

Among the main findings of the report, the authors maintain that during the past five years, civilian public expenditures in Israel declined as a percentage of GDP, while growing in most Western countries.

In addition, the report has found that wage gaps in Israel are high compared to every other developed country, and they are manifested especially in the gaps between workers of varying levels of education.

The gaps between employees with work experience of 10 years and above to employees with fewer years of experience have remained around 50% over the past decade, and wage gaps between men and women have declined from around 40% to around 35% over the same period. However, wage gaps between employees with over 12 years of education and those with up to 12 years of education have increased from 66% in 1998 to 80% in 2009.

The report also states that the poverty rate among the working population in Israel is high and increasing. Today, most poor people in Israel come from families with a family member who is working. Single-parent households in Israel tend to be very poor – over a third of such families are below the poverty line – compared both to two-parent households and to single-parent households in the West.

As for education, the report found that between 2000 and 2010, the number of students in the state and state-religious school systems declined by 1%, while the number of Arab students grew by 46% and the number of haredi students grew by 58%.

The report also addressed public opinion in Israel. The results of the Taub Center's annual social survey show that the sense of social security has increased in the past year, after several years of decline. In Israeli society, individuals' income and education levels impact differences in the sense of social security to varying degrees.

• For the full report click here
  

The Taub Center for Social Policy Studies in Israel, headed by Professor Dan Ben-David, is an independent, non-partisan institution for socioeconomic research based in Jerusalem.

• Follow Ynetnews on Facebook