Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Narrowing Socioeconomic Disparities as an Element of National Strength

By Bank of IsraelFeb 13, 2011 04:04AM ET
The Deputy Governor of the Bank of Israel, Prof. Zvi Eckstein, presented today the main points of the policy paper produced by the task force that he heads, submitted to the 11th Herzliya Conference. The paper proposes the narrowing of economic disparities, social integration, and the advancement of socioeconomically disadvantaged population groups as a strategic objective for Israel.

At the outset of his remarks, Prof. Eckstein stressed that the treatment of the disparity issues requires consistent, multidimensional, uninterrupted, and long-term attention. A requirement for such attention is economic stability, supported by the budget credibility that Israel has attained in recent years. Current headlines that demand the populistic policy response of tax cuts as a reaction to the increase in prices and the implementation of the minimum-wage increase several months early may prejudice the credibility of fiscal policy and, therefore, should be rejected. Furthermore, these measures divert the focus from real and consistent attention to the problems of social and economic gaps. The newspaper headlines, Prof. Eckstein emphasized, are largely the result of inadequate government investment in long-term treatment of the matter.

The main problem that policy faces in this field, the Deputy Governor noted, is the widening of disparities in employment, income, and human capital, resulting in the fraying of social resilience and detriment to economic growth. Policy should focus on increasing employment and labor income by enhancing the human capital of socioeconomically disadvantaged population groups. To accomplish this, measures should be applied to boost these groups’ level of skill. The education system should focus on imparting skills in fields such as linguistic literacy, scientific and technological writing, computer skills, business entrepreneurship, financial markets, economics and accounting, etc. An infrastructure should be created for the integration of students in employment (manufacturing, trade, public services), e.g., by establishing one-stop centers for high-school graduates.

The Deputy Governor mentioned the targets that the Government has adopted in respect of employment: raising the employment rate of working-age persons from 70 percent today to 76 percent in 2020, to be reflected in all sectors and foremost among Arab women and ultra-Orthodox men, thereby expanding the labor force by 33,000 workers each year beyond natural increase and raising the GDP growth rate by 0.5–1 percent; and reducing poverty by enabling the lowest quintile to increase its income by 10 percent more than the increase in the median income by 2020, thereby boosting real household income by 27 percent and lowering the incidence of poverty by 1 percentage point.

Prof. Eckstein listed the tools that may be used to attain these goals: establishing referral, training, and incentivization centers for special population groups; tougher enforcement of labor laws, especially those relating to the minimum wage and the employment of undocumented foreign workers; preventing discrimination and applying affirmative action for special population groups; assuring access to academic studies for Ultra-Orthodox and Arabs; daycare centers in the Arab sector; the creation of subsidized public-transport infrastructure geared to employment; and nationwide application of the Earned Income Tax Credit. The implementation of these programs, coupled with the possibility of expanding and deepening them, will set the economy on a trajectory of smaller and smaller disparities and growth based on an increase in the employment and income of socioeconomically disadvantaged population groups.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email