Histadrut turns up heat on minimum wage debate

Nissankoren pushing for NIS 1,000 increase to current monthly minimum wage of NIS 4,300.

Shekel money bills (photo credit: REUTERS)
Shekel money bills
(photo credit: REUTERS)
The Histadrut labor federation on Monday promised to do everything in its power to increase the minimum wage, as it builds toward a possible general strike next week.
“I will fight as hard as I know how so that there will be a real change here,” Histadrut chairman Avi Nissankoren said at a Knesset Labor, Welfare and Health Committee meeting on the subject.
While acknowledging that a strike would hurt the economy, Nissankoren defended the tactic as a means to an end.
“If there’s a need for a fight, then there will be a fight,” he said.
Nissankoren is pushing for a NIS 1,000 increase to the current monthly minimum wage of NIS 4,300. Several ministers and business groups have already come out in favor of increasing the minimum to NIS 5,000 – a 16% increase – and noted that an extreme jump could lead to higher unemployment. Small and medium businesses that cannot absorb the extra costs, which will be higher due to accompanying increases in mandated employer contributions, might stop hiring, or even have to fire workers.
A study by the Institute for Civic Responsibility at the Center for Academic Studies in Or Yehuda said the minimum should be even higher, at NIS 5,600. According to the study, a family with two children needed NIS 11,300 to get by, while a single, childless person needed NIS 4,661.
Nissankoren argued that the low minimum wage was perpetuating inequality. In the past 10 years, he said, the economy has grown dozens of percentage points, but the share that has gone to employees has fallen from 68 percent to 62%. All that extra wealth, he said, ended up in the pockets of “the capitalists.”
“The ministers have to decide what we want there to be here. A nation of poor people? A nation of contract workers? A nation that degrades the weak?” he said.
Meretz MK Ilan Gilon backed him, calling an increase in the minimum “the basis for solving the economy’s problems.”
Nissankoren met with Finance Minister Yair Lapid and Zvika Oren, who chairs the presidency of business organizations, to discuss the minimum wage and two other issues at stake with the strike: contract workers and the government’s employment of people with disabilities.
The group established three joint working groups – one for each topic – and will meet again Thursday.
Oren said all parties had “agreed that action must be taken on behalf of the weak in society and closing social gaps, though orderly negotiations, with a clear and full schedule and without the threat of a strike overhead.”
Lapid stressed that he agrees with raising the minimum wage, but steps have to be taken to ensure it does not lead to layoffs, and that the state should take responsibility for sorting out contract workers’ conditions.
Nissankoren said the government had failed to meet the commitment it made to round out 3% of its workforce with people with disabilities.
Meanwhile, an Organization for Economic Cooperation and Development report released Monday found that while social spending was rising to historic levels in OECD countries still reeling from the financial crisis, Israel’s social spending remained relatively stable, and significantly lower. While the average OECD country spent 22% of GDP on social spending in 2014, up from 19% in 2007, Israel spent a consistent 15% of GDP across the entire period.
The Bank of Israel has championed measures such as negative income tax, which adds to low-wage workers bottom lines, but comes out of the state coffers instead of burdening small businesses. BoI Governor Karnit Flug has also said that there is room for increasing the minimum wage.