More than four decades of pro-market policy in Israel have led to one of the highest rates of inequality in the developed world. But in recent years, Israeli society has proven to be in the midst of a tectonic shift – inequality is on the decline.

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How can this be? With a decade of growing trade union membership, rising public support for unions in general, white-collar workers striking to improve working conditions, and widespread public consensus that something is wrong with the current economic system, all indicators are pointing to change.

Inequality Rates Decreasing (GINI Index) (Graphics: Davar)

Across the world, inequality rates are on the rise. Within the developed countries around the world, inequality has been steadily rising since the 1980’s, as income growth has been felt largely at the top 1 percent. Income growth within countries has been disproportionately felt at the top 1 percent and the bottom 50 percent of global populations. Simply put, the super-rich are getting richer, and the bottom 50 percent are experiencing incremental gains, while members of the middle and working classes have seen no major pay rises since the 1970's, and are largely stuck earning what they used to earn 50 years ago

Israel is not exempt from this global trend. Once a case study of a progressive society with unprecedentedly low rates of inequality, Israel has since the mid-1980's adopted an aggressive neoliberal agenda, with widespread privatization, sweeping cuts to public spending and a decline in the middle and working class' share of income. This has led to a dramatic rise in inequality in recent decades. Israel is listed as the 5th most unequal nation in the Organisation for Economic Co-Operation and Development (OECD) according to its GINI inequality index. Israel is ranked 32nd out of 36 member nations, ahead of only Chile, Mexico, the United States, and Turkey, as of the 2017 survey (The last year for which data is available).

However, there are signs that this trend is beginning to shift. For over a decade now, Israel has seen a decline in inequality. Contrary to the overwhelming majority of OECD nations, Israel, alongside France, is one of only two OECD nations to report a consistently falling GINI index since 2010, according to World Bank estimates.

Histadrut headquarters in Tel Aviv. The biggest and fastest growing Union in Israel is one of the main drivers of declining inequality. Credit: Gil Plotkin.

Why is this happening in Israel? A large piece of the puzzle begins with the Israeli social protest movement of 2011. Even though inequality rates have been declining in Israel for just over a decade now, something happened in 2011 that changed the general public's attitude to inequality in Israel.

Alongside the Occupy movement in the United States, hundreds of thousands of Israelis took to the streets to protest the high cost of living. Over the entire summer of that year, protesters occupied major streets in cities around the country, demanding the government take action to reduce inequality and raise standards of living. These sentiments were felt by a broad and diverse cross-section of Israeli society, as over 450,000 (roughly one in twenty) Israeli citizens took part in  what was the largest protest in the nation’s history.

The Occupy Wall Street movement, 2011 (David Shankbone/ Wikimedia)

While the social protest movement did not culminate in concrete reforms at the level of government policy, social justice gained a place in the national agenda.

Social Justice demonstrations in Jerusalem, August 2011. Archive. Credit: Uri Lentz/Flash90

 

“The protest was the first time, at least in my memory, where people rallied and said that there is a problem,” explained Roee Neuman, one of the activists involved in the protests. “This, by the way, is something that has really changed in Israeli culture. People have always felt comfortable saying that the collective situation was bad, but before the protests people were unable to say, ‘I’m struggling financially’ – they felt a lot of shame."

In many respects, the protest movement redefined the way poverty, financial hardship and inequality are perceived in Israel. Neuman claims that socio-economic issues were never high on the national agenda before the 2011 protests.

 "All anyone talked about was the Palestinian conflict, party politics or civil issues. It just wasn't something people talked about much. They just accepted it as something that can't be changed," said Neumann.

“The protests succeeded in changing people’s consciousness. Our job isn’t finding the solutions, that’s on the government. The government has failed, but the protests succeeded big-time.”

The protest of summer 2011 also dealt with the prices of housing in Israel. Thousands of people lived in tents in central locations in major cities in Israel.

 

These cultural changes cited by 2011 protest activists have had a considerable impact on recent developments at the national level. One of these is a widespread public opinion survey conducted recently, examining the popularity of labor unions in Israel. The poll reveals that  89 percent of respondents are in favor of trade unions. This is vastly higher than other OECD nations, with a Gallup poll from 2018 revealing that union disapproval in the United States is 3.5 times higher than in Israel.

Public Support for Trade Unions
According to CBS (Central bureau of statistics) opinion poll, 2016 (Graphics: Davar)

This new, more active attitude to social and economic inequality has also reached party politics. Since 2011, two prominent protest leaders have joined the Knesset, and both have risen to top positions in the left wing parties. One of them, Itzik Shmuli, who was head of the Student's Association during the protests, is now third on the Labor Party's list – and has openly supported several initiatives to raise benefits for low income and disabled workers.

Roee Pearlman, a social worker who also took part in the protests, describes the summer of 2011 as one of the most formative experiences of his life.

"It was a very special, very unique experience for me. Even before it all started, I was thinking that we really have to see some deep changes here in the way our society works, otherwise there's really no future for us here. But it was only after the whole thing ended that I decided that's what I want to do with my life," Pearlman said.

Like many other Israelis who joined or created unions following the protests, Pearlman became a union representative for the social worker's union.

Roee Pearlman, summer of 2011.

"We started by mapping out where social workers were employed on short term contracts, without tenure. We then took that information to the union, and in 2015 we achieved some very important goals. We managed to get 1,700 social workers onto permanent contracts," he said.

Social workers' protest march. Archival. Credit: Social Workers' union

Pearlman is not alone. Organized labor is making an impressive comeback in Israel this last decade, with union membership rising to one of the largest shares of the workforce within OECD countries. Apart from the Scandinavian countries, where union membership still accounts for over half of the total workforce, Israel has the third largest share of union members.

But what is even more telling is the trend in recent years – as opposed to the trend in almost all the developed world, union memberships are rising in Israel, with 105,000 new memberships between 2012 and 2016.

This trend also goes against the grain of OECD trends. which show dropping labor union membership almost across the board. In the US, membership is continuing to decline, with only 10 percent of workers reporting union membership in 2018, compared with 12 percent in 2010. In Israel, on the other hand, union membership has risen from 25 percent of the workforce in 2012 to 27 percent in 2016.

Share of union members out of total workforce, 2012 – 2016 (Graphics: Davar)

Israeli unions have also managed to spread into professions that were regarded until recently as anti-union. One such case, that has attracted international attention, is the successful unionization in the telecom industry. Today that Union is also a part of the Histadrut.

Emergency assembly lead by workers’ committees with hundreds of workers participating, Pelephone headquarters, September 19th.

Traditionally, telecom employees are considered white-collar workers, and are usually not represented by unions. Even so, in 2012, after a 28-day strike and a highly covered struggle with the management, the first union of telecom workers was established.

The union of telecom workers is just one example of an impressive wave of worker mobilization that Israel has been seeing in recent years. Since the 2011 protest movement, a large number of new unions have been formed. Much of this has been happening in industries that are usually not regarded as working class. Among the new unions formed since 2011 are many white-collar professions, including accounting, insurance, athletics and the media.

Yehiel Shamir, The Histadrut's head legal advisor thinks that one of the reasons that membership is growing has to do with the obvious benefits of joining.

Yehiel Shamir, Histadrut's head legal adviser. Credit: Histadrut

"Statistics show clearly that union members earn higher than average salaries" Shamir told Davar. "While the average union member earns 9,919 shekels a month, non-union workers earn about 2,000 shekels less. The improved salary and working conditions in unionized workplaces helps bring inequality rates down in Israel, as opposed to other countries."

And that's not all. Workers' committees are active in struggles to take on contract workers as regular (and unionized) workers, and in hiring and integrating people with disabilities.

While a national sentiment of despair can often be felt in light of a lack of governmental changes, one can concretely see the shifts in social consciousness being translated in various numerical measures in Israel over the last decade. A consistently lower GINI index, rising public support for labor unions coupled with increasing overall union members all come together to tell the story of the decade following the social protests in 2011: that while there is still certainly much room for improvement, things seem to be moving in the right direction.