The disparity of incomes between Israel's Ashkenazim…

The disparity of incomes between Israel's Ashkenazim and its Oriental Jews has actually widened despite Labor's frequent references to closing the socioeconomic gap separating the two groups.

Minister of Finance Pinchas Sapir's program of encouraging foreign investment and subsidizing private investment between 1968 and 1971 had led to an economic boom; GNP has grown at seven percent per year.

Given the persistent dominance of Labor institutions in the economy, however, this economic growth has not been evenly distributed.

The kibbutzim, moshavim, and Histadrut enterprises, along with private defense and housing contractors, have enriched themselves, while the majority of Oriental Jews, lacking connections with the ruling Labor elite, have seen their position deteriorate.

Furthermore, while Oriental Jews remain for the most part in the urban slums, the government provides new European immigrants with generous loans and new housing.

This dissatisfaction leads in early 1971 to the growth of the first Oriental protest movement—the Black Panthers—based in the Jerusalem slums.