Average wage in Israel dips slightly as economic recovery continues

The average monthly salary for Israeli employees dipped slightly in recent months to NIS 11,667 ($3,710), down from 11,799 ($3,752) in August and NIS 11,772 ($3,743) in July, as the Israeli economy continues to recover from the COVID-19 pandemic.

The Central Bureau of Statistics said on Thursday that 3.622 million Israelis were employed in September 2021, the most recent month for which data was available (in Hebrew).

The health and welfare services sector employed the most people — over 505,000 in September — with an average salary of NIS 9,338 ($2,969), followed by the education sector with roughly 499,000 workers and an average wage of NIS 8,743 ($2,780).

At the top of the pay scale, the celebrated Israeli tech sector showed average monthly salaries of NIS 26,242 ($8,344) in an industry of 349,000 people, an increase of 8% compared with September 2020. This is followed by workers in the electricity and water provision, and sewage services sector with an average wage of NIS 20,530 ($6,528). The latter employs about 31,000 people in a sector that includes market monopolies.

At the bottom of the pay scale, the average salary for hospitality workers was NIS 5,416 ($1,722) per month. The minimum wage in Israel stands at a monthly NIS 5,300 ($1,500), or NIS 29 ($9.2) an hour, likely indicating that many hospitality workers may not be employed full time.

The government announced earlier this month that it would gradually increase the monthly minimum wage to NIS 6,000 ($1,912), or about NIS 33 ($10.5) an hour by 2025.

Recovery in the tourism sector has been very slow and continues to be hindered by the pandemic.

Meanwhile, the unemployment rate has been dropping. In October, the overall unemployment rate stood at 7 percent, down from 7.9% a month earlier, according to the Central Bureau of Statistics.

There were 301,000 Israelis out of work in October, according to CBS figures, down from 338,000 in September.

Before the pandemic, an estimated 150,000 Israelis — or 3.5% — were unemployed. The unemployment rate excluding those affected by the pandemic was at 5.6% in October — down from 6.1% in September.

The overall figures pointed to an ongoing positive trend that began during the second half of the pandemic.

Last week, the OECD said the Israeli economy rebounded strongly in 2021, citing the country’s ongoing booster vaccination campaign, a recovering labor market, and a booming local tech sector.

“Economic activity rebounded strongly in 2021 and GDP is projected to grow robustly by 6.3% in 2021, 4.9% in 2022 and 4% in 2023,” the OECD said in its December 2021 Economic Outlook report.

The report said the Israeli government has enjoyed “strong revenue growth, driven by buoyant activity in the high-tech and real estate sectors,” as well as the phasing out of most COVID-19 emergency support measures, and that authorities now target a central government budget deficit of 3.9% in 2022, down from around 11.6% in 2020.

The organization projected that the Israeli unemployment rate will stay above pre-pandemic levels until the end of 2023, which will affect wage growth.

In July, the government ended unemployment benefits for most people under the age of 45 who lost their jobs due to the pandemic, following a stormy Knesset session.