Netanyahu lends support to minimum wage hike

Netanyahu lends support to minimum wage hike

Histadrut labor union welcomes move; will take effect gradually beginning April

Marissa Newman is The Times of Israel political correspondent.

Prime Minister Benjamin Netanyahu speaks during the weekly cabinet meeting on Sunday, December 21, 2014. (photo credit: Emil Salman/POOL)
Prime Minister Benjamin Netanyahu speaks during the weekly cabinet meeting on Sunday, December 21, 2014. (photo credit: Emil Salman/POOL)

Prime Minister Benjamin Netanyahu on Sunday came out in support of an increase in the minimum wage, saying that he had instructed the Finance Ministry to raise it to NIS 5,000 ($1,200) a month.

The head of the Histadrut labor union hailed the advancement of the move, and said the gradual NIS 700 ($178) increase — which would extend to both private businesses and the public sector — would be implemented beginning in April.

“This morning I met with Histadrut [labor federation] Chairman Avi Nissenkorn and Manufacturers Association of Israel President Zvi Oren,” Netanyahu said at the weekly cabinet meeting. “I informed them that I have instructed the Finance Ministry to enable the cabinet to raise the minimum wage to NIS 5,000.”

Nissenkorn welcomed the move as “an important announcement,” and said the gradual increase would be felt in April.

The labor union chairman’s comment regarding the timing of the hike contradicted the terms of an agreement reached on December 3, which maintained that the 16 percent increase is to be implemented in three stages — 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).

At the time, due to Netanyahu’s firing of finance minister Yair Lapid, the Histadrut deal did not apply to government workers, as all talks between the labor associations and the government have been frozen until further notice. However, Netanyahu’s move on Sunday as acting finance minister would extend the hike to all employees.

The Globes business daily reported that the deal still has several hurdles to pass, including receiving the approval of the ministry’s wages commissioner. The attorney general must also rule on whether the deal will extend it to all employees, and whether the agreement can pass under an interim government.

Between a quarter and a third of Israeli workers are employed on a base salary of minimum wage, which currently stands at NIS 4,300 ($1,076), Channel 2 reported.

The salary bump came amid two recent poverty reports, which maintained that 1.6 million Israelis live under the poverty line, and that the average Israeli household spends hundreds of shekels more than its income monthly, primarily due to housing costs.

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