World Inequality Report: Israel among most unequal countries

Homeless in Rothschild Boulevard Photo: Kadya Levy
Homeless in Rothschild Boulevard Photo: Kadya Levy

The report headlines the Israel section, "High-income inequalities in a high-income country."

2021 has been a good year for billionaires as Richard Branson and Jeff Bezos competed to be the first private businessperson to reach space. Branson won by a week but Bezos can take comfort from his wealth, which swelled to $202 billion during the pandemic. Even so it probably rankles that he is not the world's wealthiest person, which is a title, according to Bloomberg, that belongs to Elon Musk with wealth of $278 billion.

The race to space is anecdotal but reflects a widespread trend during the Covid pandemic in which the rich got richer - by 50% between 2019 and 2021, according to the World Inequality Report 2022, published this week by The World Inequality Lab, housed at the Paris School of Economics and the University of California, Berkeley.

According to the report, the gap between the average incomes of the world's top 10% and the bottom 50% of individuals within countries has almost doubled, from 8.5 times to 15 times over the past 20 years.

The report has a section on Israel, headlined, "high-income inequalities in a high-income country. The report says, "Israel is an affluent country. The average national income for the adult population is equal to €PPP43,100 (or NIS223,040). This is higher than affluent Western European countries such as France (€PPP36,300) and the UK (€PPP32,700) but lower than the US (€PPP54,300). However, Israel is one of the most unequal high-income countries. The bottom 50% of the population earn on average €PPP11,200 or NIS 57,900, while the top 10% earn 19 times more (€PPP211,900, NIS 1,096,300). Thus, inequality levels are similar to those in the US, with the bottom 50% of the population earning 13% of total national income, while the top 10% share is 49%."

Explaining the historical context, the report said, "Overall, income inequality has remained at a very high level in Israel over the past 30 years. Liberalization reforms of the mid-1980s and 1990s led to a marked increase. While inequalities have slightly decreased since 2012, they remain at a very high level, in the context of a highly segregated society."

Israel is also slammed in the report for the lack of transparent data. The researchers give each country a mark between 0 and 20 for the transparency of its data with Israel scoring just 3, compared with Indonesia (6), India (5.5), Japan (6) and Italy (13). The researchers describe much of the data on Israel as low quality, compelling them to rely on surveys, and in many cases the data is only updated to 2016.

One area in which Israel fares relatively well is gender inequality. The report says, "The female labor income share in Israel is equal to 38%. This level of inequality is comparable with levels in North America (38%). Gender inequality is slightly higher than in Western Europe but significantly lower than in the neighboring Middle East countries (15%). In the first part of the 21st century, inequalities decreased quickly, with female labor income share gaining 10 points between 1991 and 2019."

Israel is also out of step in terms of carbon inequality. The report says, "Carbon consumption in Israel is significantly above world average. With 12.5 tonnes of CO2 equivalent per capita, yearly greenhouse gas emissions are higher than the average in the EU. They are, however, lower than in the US (21 tCO2e/capita) and Canada (20 tCO2e/capita). While the bottom 50% and middle 40% of the population respectively emit 13 and seven tonnes of CO2 equivalent every year, the top 10% emits 40 tonnes."

Published by Globes, Israel business news - en.globes.co.il - on December 9, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

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