The five big banks in Israel finished the year 2006 with net profits of almost 9 billion Shekels. The net profit of Leumi, Bank Hapoalim, Israel Discount Bank, Mizrahi-Tefahot and First International Bank of Israel grew last year by about 38% in an economy with zero inflation. It is the greatest profit in the history of the Banking Field in Israel. Two big banks in Israel even announced last week “annual return objectives of two digits”. This is the content of the message given by the vigorous bank spokesmen in an “economic” language. And how can these words be translated into Hebrew? The heads of Bank Hapoalim and Israel Discount Bank want a return on capital of more than 10% per year. Thus was written explicitly in the “strategic plan” of Bank Hapoalim for the coming five years. This year the bank wants to achieve 16% return on capital. The objectives of the heads of Discount Bank are much more modest: 12-13% each year for the coming five year. Bank Mizrahi-Tefahot, much smaller than the two big ones, already achieved this year the objectives of Discount Bank. This year the Bank had a return of almost 14% on its capital (in comparison to 12% last year). The net profit that this “little” bank had last year is almost 650 million Shekels, an increase of 27% in profits compared to 2005.
The huge profits of the larger sector of employers, especially in the financial sector, contradict with what is happening in Israeli society, especially in the working class, and the status of the workers keeps deteriorating. According to recent research by two economists from the Histadrut (partly published in the economical supplement of Haaretz last week), Sagi Yanko and Dalia Azmon, the number of low salary workers is persistently growing. The percentage of employees whose wage is not above the minimum wage out of total employees in Israeli economy increased in the last decade from 23% to 29%. The percentage of employees (most of them female) in part-time jobs among the total employees grew in the same period to 30%. One out of 5 workers in the Israeli market works a part-time job despite their wish to work a full time job. A decade ago one of ten workers was employed in part-time job against their wishes.
Furthermore, in the last decade the number of poor families among working families was multiplied by 2.5, from 63,000 to 154,000 families, and they now constitute about 40% of the all poor families in Israel. This in comparison to 30% a decade ago. More than half of the employees (1.3 million workers) do not pay income taxes because they earn less than 5,000 Shekels a month. 1.8 million employees earn up to 6,500 shekels, a wage that does not even cover the average monthly expenditure for an Israeli family in the lowest decile – 7,500 Shekels. By the way, the average monthly expenditure for a family is now 11,000 Shekels.
The economists of the Histardrut determine in their study that “the existence of a huge low wage workers sector with, as formed among us in front of our eyes, is opposed to healthy economic logic and outrageous for those who believe in social justice”. In other words, it is not right economically and it is not right socially. But try to explain the facts of life of a worker earning minimum wage (3,585 Shekels per month) to Eli Yones, ex-senior Ministry of the Finance official and current C.E.O of the Mizrah-Tefachot Bank, whose salary last year summed up to more than 10 million Shekels. Yes, the C.E.O Yones earned last year a monthly minimum wage… every single hour.