Israel has one of the highest inequality or Gini indices (Gini – a coefficient describing the degree of inequality in a country where 1 is the highest and 0 the lowest) in the developed world, almost the same as the US. The difference between the wages of the top 10% and the bottom 10% of Israelis is currently increasing. Moreover, wage inequality is highly race-based, with Palestinians who work in Israel and dark-skinned immigrants having the lowest wages, and Middle Eastern or African Mizrahi Jews falling in the middle.
According to the Israeli newspaper Haaretz, in 2016 an Israeli Arab worker earned 58.6% as much as a Jewish worker, down from 67.2% in 2014. For Arab women, it was even worse-56% of a Jewish woman’s wage. Mizrahi Jews, who make up about half of the population, earn about 75% as the Ashkenazi Jewish worker. So overall, the race-based differences in Israel are even greater than in the US.
In Israel there are also great gaps in education and health, housing and wealth. 13% of Israeli Arabs have college degrees, versus 28% of second-generation Mizrahis and 50% of Ashkenazi Jews. The life expectancy gap between Israeli Arabs and Jews is five years. Of course, it is higher if you compare Israel and West Bank, rising to seven years. Infant mortality is about three times higher in the West Bank as in Israel. 40% figure for Palestinian men can expect to end up in prison. In Israel, even among Jews, there is high unemployment, a huge housing shortage, and deficits in education. This explains why 80% of the population participated in or supported the mass protests about these issues in 2011.
The racism with which Israelis are inculcated from an early age allows these disparities to be tolerated, thought of as natural or even applauded, yet many are unaware of what an inegalitarian society also exists at the West Bank. Although the earnings of all strata of society are well below those in Israel, there is a similar ten-fold difference between the top and bottom percentiles, leading to a calculated GINI of .34, almost identical to that of Israel.
Tariq Dana, a professor at Hebron University, and the Palestinian activist and author Ali Abunimeh, describe a very few families and companies, such as the Masris, whose power has skyrocketed since Oslo dominate the West Bank economy. And they do plenty of business with Israel, as well as exploiting other Palestinians. They largely consist of returning émigré capitalists, historical large landowners, and those who accumulated wealth as subcontractors for Israeli companies after the 1967 occupation. They benefit from ties to the Palestinian Authority (PA) and from Palestinian basic law, which speciﬁes that “the economic system in Palestine shall be based on the principles of a free market economy.”
During the 1990s, the PA, which governs the WB, and a small group of capitalists centralized political and economic power and built ties with diaspora conglomerates, leading to monopolies protected by the PA of 25 basic imported commodities such as sugar, oil, cement, and steel. Partnerships with Israeli businessmen and the privileges that that accorded increased after Salam Fayyad became Prime Minister in 2008. Economic cooperation with Israel is manifest in joint industrial zones, Palestinian investments in Israel and its settlements, and joint management of water resources. Five West Bank companies are clients of an Israeli security company owned by an Israeli Major General who commanded troops in the Occupied Territories.
Fayyad’s “reforms” also allowed the government to take out interest-bearing loans equaling 50% 0f the GDP, which puts it at the mercy of large firms who can withhold investments. The cost is borne by ordinary people, as when taxes were raised and services cut in 2012. Private lending has also increased, so that 75% of public employees, the largest sector of workers, are now in debt to government-controlled banks, which decreases oppositional political activity. Labor unions have been greatly weakened by both the PA and large capitalists. The PA spends about one-quarter of its payroll on security, largely to prevent protests against Israel, roughly the same amount as on health and education combined.