The Staggering Gulf Between Salaries In Israel’s High-Tech Sector And The Rest Of The Economy
The average salary in Israel’s high-tech sector stands at more than six figures (USD). But the rest of the economy lags behind. The difference is more than two-fold.
As reported in the news today, Israel’s national statistics body, The Central Bureau of Statistics (CBS) recently released its updated salary figures.
The average salary underwent a relatively substantial rise of 10.7% although the report noted that many workers in lower paid jobs were out of the workforce and thus not included in the statistics.
“High tech” has its own average, though, and the average salary in that sector of the economy rose 12.6% from the beginning of the year to 28,837 NIS
Salaries in Israel are quoted on a monthly rather than annual basis.
The equivalence of both those figures to the US dollar — at the exchange rate operative at the time of writing — is as follows (rounded to the nearest dollar):
Economy-wide average = $44,671
High-tech sector average = $106,057
To put that in perspective: the latest high-tech salary average is 237% of the economy-wide average.
The Catch: Most Israeli Workers Don’t Work In High-Tech
As successive nationwide salary surveys continue to make clear, there are segments of the economy that are doing very well indeed from Israel’s high-tech ecosystem — even during pandemic times.
The fact that the average salary in the sector exceeds six figures — in the US dollar — is nothing short of staggering.
But there are a few more datapoints required to interpret this information in its proper context:
- The vast majority of the Israeli workforce — during some years more than 90% — does not work in the sector defined as ‘high tech’
- Israel has one of the most expensive costs of living in the world. A recent survey ranked it in eighth place globally.
The latest salary data from the CBS makes clear that there are many in Silicon Wadi doing exceptionally well from the export-led sector of the economy that sells leading technology around the world.
But, in addition to the above, it’s also worth remembering that even within the world of “high tech” there’s a significant variability in terms of salaries paid. While even rookie algorithm developers can comfortably demand starting salaries well above 20,00 NIS, the starting payscale doesn’t start at such lofty heights in other departments in the organization.
While Israel’s high-tech scene tends to be dominated by smaller organizations and startups, the arrival of R&D centers of major multinational tech players has likely also had a buoyant effect on average salaries, even if those are often impossible for local operators to compete against.
The massive gulf in salaries between Israel’s tech sector and the rest of the economy underscores the large gap between Israel’s haves and have-nots (25% of Israel’s population lives below the poverty line).
Increasing participation in the high-tech boom and upskilling immigrants and sabras alike to be able to participate in it can be expected to be a major economic concern for policymakers going forward.
