'$1,000 min. wage would hurt bosses'

Israel Institute for Economic Social Research chairman Roby Nathanson called for the formulation of an overall national plan to reduce poverty.

By DANIEL KENNEMER
December 20, 2005 07:55
2 minute read.
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Raising the minimum wage to $1,000 per month - or any other increase - would "undermine the ability of employers to survive," Israel's major economic organizations agreed. Nonetheless, the business leaders present at a meeting on Sunday expressed willingness to discuss the matter with the Histadrut labor union, whose former chairman Amir Peretz recently advocated the raise, their coordination committee said Monday. Those present included Manufacturers Association in Israel President Shraga Brosh - who chaired the assembly; Federation of Israeli Chambers of Commerce President Uriel Lynn; and representatives of the country's self-employed, artisans and small industrialists, merchants, hoteliers, and insurance companies. Separately, Lynn expressed his opposition Monday to both canceling the value added tax (VAT) on food items and implementing a negative income tax (NIT) system. Removing the VAT on food items would "wreck the foundations of a tax central to state revenues," while NIT is a "concept that many have been captivated by, but which lacks substance," he said. "It is [just] another welfare system, which the government offices are not prepared to implement." Israel Institute for Economic Social Research chairman Roby Nathanson called for the formulation of an overall national plan to reduce poverty, which would address competing priorities, as opposed to "point-by-point measures." "That Israel has a poverty problem, that poverty is also spreading among workers, and that poverty must be addressed, is not under dispute," but specific measures are always liable to cause damage in other areas, he told The Jerusalem Post. "There never is a 'win-win situation.' It's a zero-sum game to a certain extent," he said. NIT is indeed a substitute for welfare, he noted, stressing that it must be accompanied by measures to integrate target populations into the work force. Lynn believed the seven-year plan to tackle social distress presented Sunday evening to Prime Minister Ariel Sharon by Finance Minister Ehud Olmert was "in the right direction." "The guidelines focus on the most important target that the state should set for itself - expanding the population's participation in the work force," Lynn said. Nathanson, however, said the program's proposed poverty budget of NIS 2 billion per year is "truly a joke," arguing that a minimum of NIS 5b. to NIS 6b. would be needed to fund the intervention proposed. "NIS 2b. per year is nothing. It would barely suffice to cover the natural growth of the population," he said.

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