The Histadrut Labor Federation will declare a wage dispute in the public sector this week after negotiations with the Finance Ministry over a new public sector wage deal broke down on Monday. "Public sector employees have not received any wage increase since 2001, the last year that a public-sector collective bargaining agreement was in place," said Histadrut Labor Federation Chairman Ofer Eini. "In 2003, public sector employees agreed to help the economic downturn by accepting low salaries which hurt the income of thousands of families. And now as the economy is thriving, the Finance Ministry refuses to negotiate on any wage increases, from which we can only conclude that the reasoning is not economic in nature." On Monday morning Eini met with the Treasury's Wage Supervisor Eli Cohen to resume wage negotiations, which broke down, as Cohen made it clear that the Finance Ministry had no intention of raising wages in the public sector by not even a shekel. A Finance Ministry official said that there was no justification for a wage increase to workers in the public sector given the fact that their salaries in real terms rose 1.5 percent in the years 2002 to 2006. The Histadrut Labor Federation claimed that the wage hikes were a result of promotions to higher positions, for example, and did not represent an increase for workers in the public sector as a whole. In recent months of negotiations over a new salary agreement, the public sector workers' unions have been demanding a 13% wage increase for the 600,000 public sector employees retroactive from 2001, claiming that their wages have been eroded in real terms in recent years. The Histadrut Labor Federation reasoned that many public sector employees earned very low wages and received supplementary grants to meet minimum wage standards.