Prime Minister Benjamin Netanyahu with Histadrut chairman Avi Nissenkorn.
(photo credit: HAIM ZACH/GPO)
Prime Minister Benjamin Netanyahu agreed on Sunday to increase the minimum wage for civil servants, mirroring an agreement reached earlier in the month between the Histadrut labor federation and industry leaders.
“I have instructed the Finance Ministry to allow a government- wide expansion of the minimum wage to NIS 5,000 [a month],” Netanyahu said following a meeting with the Histadrut.
The cabinet and Knesset must still approve a minimum wage bill in order for it to become law.
The Histadrut had threatened a general strike the first week of September that would have shut down ports, schools, transportation and government services, but called it off as the government coalition collapsed.
Instead of the NIS 5,300 minimum wage it was seeking in both the private and public sectors, the federation announced an agreement with the Presidency of Business Organizations, an umbrella industry group, to raise the wage to NIS 5,000 over two years.
Talks with then-finance minister Yair Lapid over including the public sector in the minimum wage rise were abandoned, however, when Netanyahu fired him from the position.
Lapid went on to accuse Netanyahu of scuttling a deal, which he said was close.
Histadrut chairman Avi Nissankorn said the move was part of an effort to help 700,000 Israelis who rely on minimum wage salaries, and said his group was committed to reducing inequality.
“Now, we must ensure that the agreement is implemented without delay,” he said.
Zvi Oren, who heads the Presidency of Business Organizations and the Manufacturers Association, praised the deal, but added that Netanyahu should take steps to boost growth.
“We support every step that will lead to a reduction in inequality gaps in Israeli society, but we must remember that raising the minimum wage is not a magic bullet,” he said. “The prime minister should take a series of steps that will allow the business sector to grow and create new jobs, such as applying negative income tax, canceling taxes on employers and more.”
Hatnua MK Amir Peretz chided Netanyahu for adopting left-leaning policy ahead of upcoming elections. Since elections were called, Netanyahu did an about-face on a Peretzbacked initiative to drop value- added tax from basic food products.
“I hope that this is not an election stunt,” Peretz said, adding that Netanyahu’s coming around to his views was “better late than never.”
Meretz chairwoman Zehava Gal-On took it a step further.
“Ahead of elections, Netanyahu woke up to the sad reality his policies have created, and is stealing his election campaign from Meretz’s platform,” she said.
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