Over the past twenty five years, economic studies indicate
that, a steady growth in inequality of incomes has taken place or become more
abundant in almost all developed countries. The worst inequality growth curve
is in Israel, which is a highly developed country. The average standard of
living in Israel has remained the same over the past few decades, however, the
position of the bottom 10% worsened, with its income declining by 1.1% a year
in Israel. For the top 10% incomes actually rose by 2.4% a year. This means
that the gap between the top 10% and the bottom 10% has grown by 3.5% a year,
which is 14 to 1. In other developed countries it only grew by 0.6% a year.
Though no studies have been done to figure out why this is, in Israel, a number
of studies that have been done around the world indicate a number of reasons.
Growth in inequality mainly comes from the labor market and in Israel inequality
in gross and net pay has raised, yet there is a continuing decline in the
employment and working hours of those with low employment qualifications. Uneducated
workers compete with Chinese laborers, Thai laborers, and Philippine care
givers, therefore, labor laws have been weakened; so an industry of contract
workers and part-time employment have found that this contributes to the
decline in wages, hours of work, and jobs for unskilled Israelis. There is a
great challenge in dealing with these inequality problems, labor laws must be
enforced. Otherwise, economic growth will be at risk.
Though I agree that globalization, technological
improvements, and poor regulation in the labor market are the three main factors
in boosting inequality and that labor laws should be addressed, after leaning
more and more about inequality in the workforce in class, I find social mobility
to be way easier said than done. Since, the degree of mobility is related to
the rate of growth in an economy and Israeli workers are competitively competing,
it is hard to jump classes. For example, if parents have a male and female
child, it is more likely that they’d choose their son rather than their
daughter to go to college, which is due to the fact that women typically get
paid less than men working the same job. Because college education plays a great
factor in promoting social mobility, most unskilled workers are women which
make it easier to pay less; creating more inequality. Also, because Israeli
workers are competing so much with other laborers, simply quitting or going on
strike is out of the question.
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