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Amid criticism from some ministers, cabinet okays bill to slowly raise minimum wage

Plan will increase monthly minimum wage to NIS 6,000 by 2025; first bump scheduled for April will be just NIS 100, drawing consternation from left-wing ministers

Finance Minister Avigdor Liberman speaks during a faction meeting of his Yisrael Beytenu party at the Knesset, in Jerusalem, on February 7, 2022.(Olivier Fitoussi/Flash90)
Finance Minister Avigdor Liberman speaks during a faction meeting of his Yisrael Beytenu party at the Knesset, in Jerusalem, on February 7, 2022.(Olivier Fitoussi/Flash90)

The cabinet on Sunday approved changes in law needed for an economic aid package that would raise the minimum wage, but some ministers voted against the plan, saying it was inadequate.

Under Finance Minister Avigdor Liberman’s new program, the minimum wage is to be raised to NIS 6,000 ($1,873) a month by the end of 2025.

However, the first hike, which will come in April, will raise the minimum wage by just 0.54 shekels an hour, from NIS 5,300 to NIS 5,400 a month, an increase of less than two percent — drastically less than many MKs have sought to advance through legislation, and below the rate that the average wage has risen.

Ministers from the Labor and Meretz parties voted against the plan, which still requires approval by the Knesset Labor and Welfare Committee. The chairman of the committee, MK Efrat Rayten of Labor, has already said that changes must be made to the minimum wage plan.

Transportation Minister Merav Michaeli criticized the economic program.

Michaeli, the head of the Labor party, said at the cabinet meeting that the government has succeeded in protecting the economy despite the ongoing COVID-19 pandemic “and precisely because of that, this government cannot afford to harm the minimum wage of so many workers and vulnerable populations, as stated in the current package deal.

“That is why we in the Labor Party will continue to work so that the minimum wage is not harmed, and I am sure that a way to raise it can be found,” she said.

Transportation Minister Merav Michaeli speaks in the plenum hall of the Knesset, on February 16, 2022. (Olivier Fitoussi/Flash90)

Environmental Protection Minister Tamar Zandberg of Meretz also spoke out, saying that the raise listed in the deal “is actually an erosion of wages and not an increase. The proposal needs to be improved.”

Meretz’s leader, Health Minister Nitzan Horowitz, slammed the Finance Ministry saying that in light of the “great growth of the economy and large surpluses in tax, collection, the state must raise the minimum wage.”

At the start of the meeting, Liberman acknowledged that “we can’t provide solutions to all the problems.”

“It is therefore right to take some major issues and address them from the ground up,” he said, according to Ynet.

The plan will also make changes in annual vacation days and overtime regulations.

Liberman urged against dividing up the plan as it makes its way through the Knesset, insisting that “this is one package” and arguing that raising the minimum wage too quickly would overburden employers and lead to layoffs.

Last year inflation in Israel was 2.8%. In addition, there have been price hikes in city rates, electricity, and fuel. The rising cost of living has prompted widespread criticism and demands that the government do more to address the issue.

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