مركزأدفا ISRAEL: A SOCIAL REPORT 2016 Dr. Shlomo Swirski | Etty Konor-Attias | January 2017 2 Israel: A Social Report 2016 مركزأدفا Adva Center P.O. Box 6136401 This report was produced thanks to a grant from Telephone: 972-3-5608871 MAZON: A Jewish Response to Hunger Fax: 972-3-5602205 www.adva.org The Adva Center is supported by the following: [email protected] Ted Arison Family Foundation Jacob and Hilda Blaustein Foundation Board of Directors Heinrich Boell Foundation Professor Yossi Dahan, Chair Sally Gottesman Ms. Gilberte Finkel (M.A.), Treasurer Barbara and Eric Dobkin Professor Ismail Abu-Saad Friedrich Ebert Stiftung Dr. Nitza Berkowitch Gandyr Foundation Professor Dani Filc Professor Rachel Kallus Hadassah Foundation Professor (Emeritus) Hubert Law-Yone Jewish Women’s Foundation of Metropolitan Chicago Professor Shosh Madmoni Jewish Women’s Foundation of Greater Palm Beaches Professor Uri Ram Levi Lassen Foundation Professor Rivka Savaiya Rosa Luxemburg Foundation Professor Oren Yiftachel MAZON: A Jewish Response to Hunger Audit Committee New Israel Fund Ms. Ruti Gur Sam and Bella Sebba Charitable Trust Ms. Hanna Langer Alan B. Slifka Foundation Tikkun Olam Women’s Foundation Staff USAID/United States Embassy Ms. Barbara Swirski, Executive Director Dr. Shlomo Swirski, Academic Director Women’s Amutot of the Greater Miami Jewish Federation Ms. Etty Konor-Attias, Research Coordinator Zabar Family Foundation Attorney Noga Dagan-Buzaglo, Researcher Dr. Yael Hasson, Researcher and Gender Expert Ms. Valeria Seigelshifer, Advocacy and Gender Expert Ms. Maytal Strul, Community Action Worker Ms. Areen Hawari, Community Action Worker Mr. Yaron Hoffmann-Dishon, Researcher and Outreach Coordinator Ms. Aviv Lieberman, Research Assistant Ms. Mira Oppenheim, Office Manager and Press Liaison Mr. Roi Maor, Financial Advisor Ms. Efrat Ya’ari, Partnerships and Resource Developer Translation: Gila Svirsky 3 WAGES BEGAN TO RISE AGAIN – BUT GAPS REMAIN LARGE The past few years have seen a Yet, wage disparities persist and income, while the other eight deciles rise in wages which is the result, are significant. In 2015, the gross shared the remaining 56.1%. It inter alia, of wage agreements monthly income of households is important to note that income earners was NIS differences within the top decile־signed by the government with the headed by wage teachers’ unions ("Ofek Hadash" 4,644 in the lowest decile and NIS between the uppermost one percent and "Oz Letmura") and public sector 58,293 in the top decile. The top two and the others were huge. employees — as well as an increase deciles (9 and 10) were responsible in the minimum wage.1 for some 43.9% of total household Earner, 2015־Gross Income of Households Headed by a Wage By income decile, gross household income, in NIS at current prices Decile Income Share of each in NIS decile in the 10־income pie Deciles 9 1 4,644 2.2% 43.9% 2 7,660 3.6% 3 10,259 4.8% 4 12,825 6.1% Distribution of 5 15,326 7.2% the Income Pie among Households 6 18,515 8.7% Headed by a Earner־Wage 7 22,206 10.5% 8 27,290 12.9% 9 34,716 16.4% 8־Deciles 1 27.5% 58,293 10 Source: Adva Center analysis of data provided courtesy of 56.1% the Consumption Department, CBS, January 2017. 4 Israel: A Social Report 2016 WAGE DISPARITIES REMAIN SIGNIFICANT The standard response of politicians figures from the National Insurance The rise in wages over the past and economists to the problem of Institute, growth in GDP per capita year or two may suggest a positive low wages is that Israel needs to during the two decades from turning point.3 encourage economic growth: more 1968 to 1988 was paralleled by The gap is still large, despite the rise and more growth. a concomitant rise in real wages in wages over the past two years. for Israelis. In the early 1990s, During the last eight years, since however, the two began to follow Without suitable social policies one year after the global ־ 2009 raising corporate taxes while ־ different trajectories, with GDP per financial crisis – the GDP per capita ־ capita growing faster than wages, increasing salaries and services has risen an average 1.9% annually.2 though both were rising. Then, the fruits of this economic growth Yet, for three decades now, through much of the 2000s, the will continue to trickle mainly economic growth in Israel has been gap widened, with GDP per capita upwards. unrelated to wages. According to accelerating more than real wages. Per Capita Economic Growth and Real Wages, 1968–2015 In percentages Change in real wage for employee positions Real change in GDP per capita 3 2.5 2 1.5 1 0.5 0 2008 2014 1988 2012 2004 1984 2002 2010 1982 1978 2000 1980 1974 1972 1970 2015 2006 1968 1986 1998 1994 1992 1976 1990 1969 1996 Sources: Miri Endeweld and Oren Heller, Wages, the Minimum Wage, and their Contribution to Reducing Poverty: Israel in an International Comparison, were provided by the Department of Economic Research, Research and Planning 2015־National Insurance Institute, December 2014 [Hebrew]. Data for 2013 Administration, National Insurance Institute. 5 SENIOR EXECUTIVE SALARIES FAR EXCEED SALARIES OF MOST ISRAELIS While the median wage rose slightly, Compared to 2014, the data from The average salary bill of the five the salaries of executives in large 2015 reveal a significant increase most senior executives of these corporations increased dramatically. in the compensation of executives corporations came to NIS 4.0 million in the largest corporations. The annually, or NIS 337,000 per month, These salaries are made public table shows that this increase did on average. thanks to the law that requires not come from salary raises, but Disparities in the remuneration of ־corporations traded on the Tel rather from stock options, while Aviv Stock Exchange to publish senior executives compared with wages, management fees, bonuses, the salaries of their five highest other employees continued to be and "other" remained more or less paid employees. We have no significant in 2015:The average stable. information about executive salaries pay of CEOs was 44 times the in companies whose stock is not The CEOS of the top 100 average wage (NIS 9,592 for Israeli Aviv employees) and 91 times the־traded. The figures below, the most corporations traded on the Tel .(Index") minimum wage (NIS 4,650 100־recent available, are from 2015. Stock Exchange (the "TA cost their firms an average of NIS 5.1 million annually, or NIS 425,000 a month. Remuneration of Executives in Corporations in the "TA–100 Index" 2011–2015 In NIS thousands, 2015 prices 100־CEO Senior executive in the TA 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Average monthly salary 467 380 387 369 425 349 291 330 301 337 Management fees 197 205 201 186 177 165 170 172 165 154 Grants 162 133 131 147 150 108 90 90 91 100 Stock options 188 119 129 97 201 127 82 96 90 162 Other 54 24 34 15 36 37 21 32 35 33 Notes: 1. "Senior executive in the TA–100" – average of the five highest paid executives in the company. T A 100 Index. This information is published under Amendment־ The data presented here were taken from the financial reports of the companies in the .2 21 of the Securities and Exchange Commission, "Remuneration of Interested Parties and Senior Executives." 3. Analysis of the financial reports reveals that, in some cases, those holding the most senior position in a company are not among the five highest paid executives of that company or the company under its control. .time position־rated to reflect a full־time employees were pro־Salaries of part .2015־time employees in calendar years 2011־Data are for full .4 5. Salary components: salary including social benefits, bonuses, stock equities, and other. 6. For some executives, remuneration is given as management fees. .2015־Source: Adva Center analysis based on data from the website of the Securities and Exchange Commission for 2011 Data on this page were calculated and analyzed by the economist and accountant Safa Agbaria. 6 Israel: A Social Report 2016 A THIRD OF SALARIED EMPLOYEES EARN MINIMUM WAGE OR LESS The National Insurance Institute earning less than the minimum wage those earning average wage or less publishes data about wages at three increased: In 2005, they comprised fell to 69.3% in 2014. earners, and by־levels: up to the minimum wage, 32.7% of wage The figures indicate considerable from minimum wage to the average 2006, this had risen to 35.1%. Since stability. Although it is generally wage, and above the average wage. 2010, the number has remained agreed that maintaining a decent Unfortunately, these figures appear constant: In 2014, it was 31.3% standard of living at minimum at a delay of two years. The proportion of those at the top wage is difficult, the proportion of During the economic crisis of the of the table has grown, with those minimum wage salaries has not second Intifada, and with the earning average wage or higher significantly lessened in the past beginning of the wave of growth that exceeding thirty percent for the first decade. followed, the proportion of those time. In parallel, the proportion of Wage Earners in Israel, by Salary Level, 2005–2014 In percentages 100 Salaried employees 90 earning less than the minimum wage 80 70 60 50 40 30 20 Salaried employees 10 earning the average 0 wage or less 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Up to the Average Twice the Three times Average ־Up to Minimum 51% minimum wage to 50% 75% the average wage or average the average wage or wage the average average wage less wage wage or more wage wage more 2005 32.7 8.2 20.4 12 73.3 17.7 8.9 26.6 2006 35.1 5.0 21.3 12.4 73.8 17.7 8.4 26.1 2007 32.8 5.9 20.9 12.3 71.9 18.4 9.7 28.1 2008 32.8 6.8 20.8 12.3 72.7 17.8 9.6 27.4 2009 33.2 5.6 20.7 12.4 71.9 18.3 9.7 28.0 2010 31.4 8.1 20.3 12.1 71.9 18.4 9.6 28.0 2011 30.5 10.6 19.9 11.7 72.7 18.3 9.1 27.4 2012 31.3 6.8 20.2 12.4 70.7 19.3 10.1 29.4 2013 31.3 4.8 20.2 13.0 69.3 20.1 10.5 30.6 2014 31.3 4.8 20.2 13.0 69.3 20.1 10.5 30.6 Note: The average monthly wage for a salaried employee in 2014 was NIS 9,939 at current prices.