Monday, July 16, 2012

Israel - a state of inequality

A 57-year-old Israeli man was in a critical condition yesterday after setting fire to himself during a demonstration by more than 8,000 people in support of social and economic justice. Moshe Silman, a former small businessman had fallen on dire financial circumstances.

In his note, Mr Silman said: "The State of Israel has stolen from me and robbed me, left me with nothing. Two committees from the Ministry of Housing have rejected me, despite the fact that I have undergone a stroke and was granted 100 per cent work disability…I blame the State of Israel. I blame Bibi Netanyahu and [the country's Minister of Finance] Yuval Steinitz, both scum, for the humiliation that disenfranchised citizens go through day in and day out, that take from the poor and give to the rich."

A new Knesset Research and Information Center study on income derived from capital shows stark disparities, with 60% of the country's income from capital assets going to the wealthiest 10 percent of households, while less than 20% goes to the least affluent 70% of households. The report deals not with wages paid as salaries to citizens of the country but rather additional income from investments or other assets held in large part by the country's wealthiest citizens. Income from capital can come from financial assets or from real estate and can include rental income, interest on savings and income from investments.

A look at income from capital assets earned by the self-employed and by corporation managers reveals an even starker picture of inequality. Among this group, the top 10% earn 87% of income generated from capital and the top 1% benefits from more than 64% of the total income from capital.

Among the poorest Israelis, there simply is usually no income from such assets while among the top 10%, where overall monthly income is nearly NIS 40,000, average income from capital is NIS 3,000 or more. Ironically, therefore, the income from capital among the wealthiest Israelis exceeds total income among the poorest among us.

The value of the average home owned by the poorest 10% of Israelis is NIS 688,000 while that of the wealthiest 10% of households averages NIS 2.2 million. The top 20% of Israelis as measured by wealth own housing worth half of the value of the entire housing stock in the country, while the lower 50% own just 20% of the value of housing.

But when it comes to ownership of capital assets, it is actually the numbers regarding non-real estate assets where the largest social disparities come to the fore.

The wealthiest 30% of Israelis own 80% of the country's financial assets.

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