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Putting Israel’s GINI Back in the Bottle

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Remember poor, egalitarian Israel? The good news: it is no longer poor by any standard. The bad news: it ranks very high among the major OECD countries in socio-economic inequality. How did it get to this point? And how can it lower its inequality to a reasonable level?

The accepted index for measuring national economic inequality – the gap between the rich and the poor – is called the GINI Index. It runs from 0 (total equality i.e., everyone has the same income from all sources – probably never achieved in world history) to 1 (very few mega-rich people while the masses are all dirt poor, such as today’s world “leaders” South Africa, Namibia and Zambia, all with a GINI between 0.5 and 0.6, pre-Corona). While there isn’t (and can’t be) any consensus regarding what’s an “ideal” GINI, it is generally agreed that anything below .3 is quite an egalitarian society, like all the Scandinavian countries.

Among all OECD countries, Israel ranks 30th out of 39 i.e., very high inequality. Even worse, among the really advanced world economies, only the U.S. has a higher GINI measure than Israel which has reached the nothing-to-brag-about index of 0.39 – even higher than all five of its neighbors: Lebanon, Syria, Jordan, the Palestinian Authority, and Egypt. Again, GINI does not measure a country’s overall wealth or poverty, but rather the internal gap between the richest and the poorest people in any given society.

It wasn’t always so. Indeed, until the 1980s Israel was indeed quite........

© The Times of Israel (Blogs)

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