It is difficult to define the phenomenon of discrimination in the labor market and to classify whether it is "Animus-Based (or Taste-Based) Discrimination" – discrimination of an individual due to his affiliation to a particular group, "Statistical Discrimination" – discrimination due to the individual's classification to a statistical group, or "Premarket Discrimination"- discrimination on the basis of considerations that come into play in the labor market, but are due to discrimination outside the labor market. Is difficult to diagnose expressions of discrimination and assess its extent, since some of its expressions are subtle.
Discrimination in the labor market may impair economic growth; if an educated and skilled person is discriminated, and not hired for employment appropriate to his abilities due to affiliation to a particular group, that means the economy is allocating its resources in an inefficient manner, and therefore compromised. In addition, discrimination in the labor market may impact socio-economic mobility in the society and obstruct the conception of equal opportunities and social resilience.
In Israel, as a heterogeneous society, there are various population groups that may experience discrimination. To prevent discrimination, Israel enacted various laws. The centerpiece of which is the Equal Employment Opportunities Law, which includes a broad reference to the prevention of discrimination based on sex, sexual orientation, marital status, pregnancy, fertility treatments, IVF treatments, parenting, age, race, religion, nationality, country of origin, place of residence, view, party affiliation, or reserve service. It is forbidden to discriminate in hiring, working conditions, promotion, professional training, dismissal or severance pay, and benefits and payments for employees upon retirement. The implementation of the legislation is not optimal due to the duration of the complaint process, the difficulty of proving discrimination, the lack of enforcement and the ability of employers to bypass rulings regarding discrimination and convey the discrimination from one component to another, less visible or difficult to detect.
The survey "Inequality in the Workplace 2016" found that 18% of the respondents had experienced discrimination in wages, 14% in promotion, 10% in associated conditions, 8% in hiring, 7% in overall attitude, 6% in dismissals and 4% in receiving professional training. The overall rate of those who experienced discrimination in their present or previous job is estimated at approximately 40% of the respondents. 45% of the respondents personally know 1 to 5 people who were discriminated and 10% personally know more than 5 people who were discriminated.
The rate of respondents who felt discrimination increased between 2009 and 2016; from 27.6% to 40%. Back in 2013, the rate of discrimination against employees stood at about 40% and remained virtually unchanged in 2016. The main areas of discrimination also remained the same during the years; primarily wages and promotion. The Arab society in Israel feels higher rates of discrimination; 60% of the Arab society personally experienced discrimination, compared with 37% among the Jewish population. The discrimination level felt by Arab respondents was higher in almost all areas of discrimination observed; Wages, promotion, associated conditions, hiring and dismissals. As with previous surveys, age is the parameter for which the workers were discriminated at the highest rate in the respondent's workplaces in the past five years; about 43%. In addition, high rates of discrimination were observed against the Arab society (35%), parents of young children (33%), disabled (31%), women in general (30%) and pregnant women and fertility treatments in particular (30%). A slightly lower rate was observed for the Ethiopian population (27%) and the ultra-Orthodox (21%). Discrimination against religious people was estimated at about 20%. The same rate was estimated against employees on a sexual or gender identity background. Discrimination in respect of political opinion was estimated at a relatively low rate of 18%. Discrimination due to reserve service is the lowest rate among the questioned fields, about 17%. Women indicated higher levels of discrimination against them than the percentage of men who indicated discrimination against women. Similarly, Arabs noted higher rates of discrimination against them, as opposed to the rate of Jews who indicated discrimination against Arabs. In addition, a high proportion of Arabs reported the existence of discrimination due to political opinion, as opposed to a lower proportion of Jews group.
To deal with the issue of discrimination, some would say that we should invest efforts in minimizing discrimination in earlier mechanisms of the labor market, such as the mechanism of higher education, the early childhood education mechanism, elementary schools and high schools, governmental mechanisms and social mechanisms. This investment can reduce productivity and capacity gaps of employees in certain groups in the labor market. This will reduce symptoms of low-wage compensation, denial of promotion and not hiring from the outset. All the more so, the lack of efficient legislation to prevent discrimination and of adequate enforcement undermines incentives and motivation of individuals from disadvantaged groups to invest necessary resources in education and professionalism.
Discrimination in the labor market is not based solely on disparities resulting from "Premarket Discrimination", but also "Animus-Based (or Taste-Based) Discrimination". Accordingly, appropriate legislation and enforcement is required. This legislation is complex, because there is a difficulty in both general and sharp and focused legislation. For example, a targeted law that prohibits the dismissal of an employee of childbearing age for any reason will result in fewer women that would be employed at these ages. A general law banning discrimination of pregnant women is not sufficient to prevent the discrimination against them.