Meretz MK addresses minimum wage protestors.
(photo credit: ANAT VARDIMON)
The Knesset’s Labor, Welfare and Health Committee voted on Tuesday to raise the monthly minimum wage to NIS 5,300 ($1,513), an increase of NIS 300 ($85.65).
The raise will take effect in December, meaning that Israelis will see the pay raise in their January paychecks.
(All figures are approximate, based on exchange rates as of Tuesday.) The hourly minimum wage will increase from NIS 26.9 ($7.68) to NIS 28.5 ($8.14), and the daily minimum wage will rise from NIS 231 ($65.95) to NIS 245 ($69.95). The Finance Ministry said the increase would cost the Finance Ministry between NIS 400 million and NIS 500m annually.
Finance Minister Moshe Kahlon (Kulanu) applauded the decision by the Knesset to raise the minimum wage.
“Raising the minimum wage to NIS 5,300 is a direct continuation of our work in favor of narrowing gaps and strengthening the working population. The state of the economy is good and during our tenure, we will make sure that all the populations benefit from it. We will continue to cooperate with our employees and employers in societal steps that will benefit Israeli citizens and the Israeli economy.”
The Histadrut labor federation had been pushing for a raise. Its head, Avi Nissenkorn, touted Tuesday’s bill, saying it would directly help some 800,000 families and adding that in the past two-and-ahalf years, the minimum wage has risen by 23%.
This is the fourth time the minimum wage has been raised since April 2015. The previous increase to NIS 5,000 per month lifted some 1.7% of families above the poverty line and reduced the number of people living in severe poverty by 3.1%, according to the Knesset Research and Information Center.
An estimated 660,000 salaried employees earned the monthly minimum wage or less in 2015, according to the National Insurance Institute. Of those who are self-employed, some 36% – or 91,000 people – earned the monthly minimum wage or less.
The minimum wage increase will also help raise the average monthly wage in the country, which stood around NIS 10,264 ($2,933) for July 2017, according to the Central Bureau of Statistics. The average median monthly salary – half of Israeli workers earned below this level – is much lower, or at about NIS 6,426 ($1,835) in 2014, according to the National Insurance Institute.
“Completing the process of raising the minimum wage by NIS 1,000 [or $285, over two-and-a-half years] is the overwhelming answer to anyone who doubted the Histadrut’s ability and determination to bring about real social change...
This is a historic increase by any measure.”
MK Eli Alalouf (Kulanu), committee chairman, said the minimum wage increase would help bring Israel in line with the OECD average – or in tune to other Western, developed nations.