 Israel was famously described in the times of the Bible as the land of milk and honey. But today, parts of it could be described as the land of skyscrapers and newfound tech wealth. From its humble socialist origins in the 1940s, Israel has transformed its economy in remarkable time, all while facing ongoing challenges to its very survival. Today, Israel is a thoroughly modern economy, with a vibrant technology sector at its nucleus. Israel has developed world and region leading expertise in fields like cybersecurity, agri-tech, and water management. In 2023, more than 90 Israeli companies are listed on US stock exchanges, including the NASDAQ. Although the following year saw a downturn in numbers, 2021 was the record-breaking year for foreign investment in the Israeli technology scene. According to IVC Research, which tracks deal flows into Israeli companies, 2021 was a record year for investment in Israel, with more than 25 billion US dollars invested in Israeli startups in a total of 773 deals. Startup exits in the same year were valued at 82.4 billion US dollars, also a record amount. With so much wealth being created within and from the Israeli tech bubble, it would be fair to assume that your average Israeli was, financially speaking, at least very well off. However, there are some other facts about Israel, which paint a very different picture. For example, Israel has one of the highest rates of poverty in the developed world. According to a report released by the La Tette non-profit in 2022, 830,000 households in Israel lived below the poverty line. That figure is equivalent to 27.7% of the country's entire population. During the pandemic, that figure surged to 38.6%. An additional 1 in 5 families in Israel are not currently living below the poverty line, but are in danger of falling below it, according to the organization. In 2019, Israel's National Statistics Body, the Central Bureau of Statistics, or CBS, reported that 22% of families in Israel live in a near constant state of financial overdraft, with their accounts in the red during 10 months of the preceding year. Perhaps more astoundingly, 42% of respondents said that they had been in overdraft for at least one month during the preceding year. Here are some more eye-opening statistics. A study released by Henley and Partners in September 2022 found that 1 in 10 residents of the coastal city of Tel Aviv, which in 2021 was named the most expensive city in the world, was officially a millionaire. 2,260 Tel Avivians had fortunes worth more than 10 million US dollars, 118 residents were worth more than 100 million, and a lucky 12 were officially estimated to be billionaires. Data released by Credit Swiss in 2019 showed that Israel had the fifth highest per capita rate of millionaires in the entire world, with an estimated 131,000 millionaires living in the country. That density of millionaires was surpassed only by Hong Kong, Norway, Portugal, and the Netherlands. I could go on with the statistics, but I hope one thing is already clear. There is both enormous wealth and huge poverty in Israel, which seems to point to only one thing, that there is a high level of income inequality. The best known formula for estimating income inequality is the Gini coefficient. A Gini coefficient of zero represents perfect income inequality in an economy, while a figure of one is a hypothetical perfect inequality. Or put more simply, the higher a country's Gini coefficient, and the more it trends towards one, the greater the level of income inequality in that country. The Gini index converts that number to a percentage. And in 2018, Israel's Gini coefficient stood at 0.351. It's useful to measure Israel's number in this regard against the other member nations of the OECD, the Organization for Economic Cooperation and Development. The 38 countries of the OECD are committed to democracy and market economies. Using its 2019 Gini coefficient of 0.342, Israel places 9th on the OECD scale. Latvia is one place ahead, meaning slightly more unequal. And Romania is one place below, meaning slightly more equal. Costa Rica leads the chart at 0.487 in the 2021 data, while the Slovak Republic is the most equal with a Gini coefficient of only 0.222 based on its 2019 data. For comparison, in 2021, the US had a Gini coefficient of 0.375, roughly 10% more unequal than Israel. A trend graph from the Shorosh Institute shows the Gini coefficient slowly climbing in Israel since the 1970s, alongside that of the United States, which is now one of the most unequal nations in the world. When Harry Deem, ultra-Orthodox Jews and Arab Israelis are excluded from the analysis, income inequality begins to look a lot less extreme, mirroring that of European geographies. So how can income inequality be reduced in Israel? That's a question probably best left up to Professor Dan Ben-David, president of the Shorosh Institute, who I'll be interviewing for this YouTube channel later this month. If you have a burning question about income inequality in Israel for Professor Ben-David, feel free to drop it in the comments or send me an email. I'll pose the best two questions I get to him. But income inequality and the Gini coefficient can be reduced in two fundamental ways, by making the rich less well off, for example by aggressive and progressive income tax regimes, or by attempting to make the poor better off. Most countries' policies focus on the latter. Some potential answers for Israel seem pretty straightforward. Increase education and workforce participation among demographics which lag behind the rest of the economy. In Israel, these traditionally include both the ultra-Orthodox Jewish sector, Harry Deem, and Arab Israelis. Increased participation in the high-tech sector of the economy, where wages far outpace those of the economy in general. One way to achieve this is by ensuring the children are offered a robust education in STEM subjects, science, technology, engineering, and math, which can form the basis for careers in these potentially lucrative industries. Finally, reduce Israel's astronomically high cost of living. Israel has one of the highest costs of living in the world, especially relative to income. Successive Israeli governments have focused on tackling this issue at its root causes, which include high levels of bureaucracy and protectionist economic policies. Israel has undoubtedly come a vast way from the socialist agrarian economy of the 1940s, dominated by Kubitsim, strong social supports, and the idea that prosperity should be shared by all. However, Israel's fervent embrace of capitalist ideology, and the widening gap between its general economy and the runaway success of its technology sector has also created serious and growing socioeconomic gaps. As Israel navigates the complicated waters of a likely global recession, it will also face the challenge of trying to ensure a more equitable spread of wealth among and boasts its current populations and generations to come. If there is a topic about life in Israel you'd like to see me produce a video about, please consider dropping me an email or leaving a comment. Thank you for watching. To get more videos like these, please consider hitting the subscribe button.