(photo credit: Bloomberg)
Increasing the minimum wage by only NIS 450 a month per person will likely help
around 75,000 individuals, including 33,000 children, escape the poverty cycle,
the National Insurance Institute’s Department of Research and Planning predicted
RELATED:Agreement reached to raise minimum wage to NIS 4,300
According to the institute’s research, poverty in Israel,
which today affects roughly 1,774,800 Israelis, would be reduced by about 4
percent if salaries of the lowest-paid workers were increased in the coming
On Sunday, the Histadrut labor federation and the Federation of
Israeli Economic Organizations announced that they had agreed to raise the
minimum wage from NIS 3,850 a month to NIS 4,100 in July 2011, and to NIS 4,300
in October 2012.
Industry, Trade and Labor Minister Binyamin Ben-Eliezer
said he supported the move. However, Finance Minister Yuval Steinitz announced
that the Treasury would not approve increasing the minimum wage.
director-general Esther Dominissini said that increasing the lowest salaries
would not only benefit employees, but also be a huge step in the country’s
battle against poverty.
Figures published last November in the NII’s
Annual Poverty Report showed a sharp increase in the number of Israeli families
joining the poverty cycle: More than 15,000 households, or 123,500 individuals,
joined the growing ranks of poor people in this country in 2009, following the
global economic crisis that set in at the end of 2008.
The report also
noted that most of the families experiencing a fall in their standard of living
actually had one working family member, with many having been forced to take
severe pay cuts and others losing their jobs, and consequently their incomes,
On Wednesday, Welfare and Social Services Minister Isaac Herzog
stressed the importance of promoting minimum wage as a means of reducing
economic disparities in the economy, as well as disparities between Israel and
other member countries of the Organization for Economic Cooperation and
Development, which Israel joined last year.