Representatives from the Histadrut labor union and the Manufacturers Association of Israel brokered an agreement Wednesday under which the minimum wage would gradually be increased from NIS 4,300 ($1,076) to NIS 5,000 ($1,252) over the course of the next two years.
The agreement received government approval, and the representatives were set to sign the deal Wednesday morning, averting a general strike that was threatened by the Histadrut.
The 16 percent increase is to be gradually implemented in three increments — the first on January 1, 2015, and the third on January 1, 2017 — ultimately boosting the hourly wage from NIS 23 ($5.7) to NIS 27 ($6.7).
Due to Prime Minister Benjamin Netanyahu’s firing of Finance Minister Yair Lapid on Tuesday evening and his move to call early elections, the agreement will not apply to government workers, as all talks between the labor associations and the government have been frozen until further notice.
Economy Minister Naftali Bennett, who attended the meeting, hailed the decision as “important news for all of Israel.”
“This was done in the proper way — through dialogue rather than force,” Bennett said in a statement posted to Facebook.
The measure was also welcomed by left-wing MKs, some of whom contrasted the apparent efficiency of the unions with Netanyahu’s crumbling and ineffectual government.
“This is not an achievement for this incompetent government, it is an achievement for the Histadrut,” Labor MK Merav Michaeli said of the decision. “This is how the Histadrut should look: caring for its disadvantaged employees and working toward minimizing the gaps.”
MK Dov Khenin of the Hadash party said the measure was “progress,” but pledged to advance a bill that would set minimum wage at NIS 30 ($7.5) before the current government disassembles.
“We cannot give up on advancing this bill,” he wrote. “I will fight for this now in a meeting with Knesset Speaker Yuli Edelstein and the faction heads. We have a majority in the Knesset of signatories for the minimum wage bill, and now we must insist that this majority be expressed in a plenary vote as soon as next week.”
The negotiations between state officials and the Histadrut broke down several times in the past few weeks, with the labor union threatening to launch a general strike.
The last time the Histadrut called a general strike was in 2012, in a bid to force limits on the use of contract workers for general services.
At the time there was an agreement with the Treasury to have cleaners and security workers be made full workers and not remain contractors, but the Treasury had been stalling over implementing the conditions, Channel 2 reported.
Since then, raising the minimum wage has also become a priority for the Histadrut.
According to Channel 2, between a quarter and a third of Israeli workers are employed on a base salary of minimum wage.
Times of Israel staff contributed to this report.