Deal near to raise minimum wage

The minimum wage will rise by NIS 300 per month, to NIS 4,150, in one or two steps, after which a joint committee will review whether to raise it again or to freeze it, on the basis of the effect of the first hike on the economy, according to informal talks between Histadrut chairman Ofer Eini and employees, according to estimates based on the talks, which "Globes" has obtained.

Some employer organizations have confirmed the report, but the Histadrut (General Federation of Labor in Israel) says, "The issue has not yet been discussed", and that official negotiations will begin in a few days, when Manufacturers Association president Shraga Brosh returns to Israel.

Lahav Israel Association of the Self-Employed president Yehuda Talmon says that he supports raising the minimum wage, but that his consent will be contingent on the Ministry of Finance first becoming more flexible on unemployment benefits for bankrupt self-employed persons, and permit a tax exemption for funds that the self-employed will set aside for hard times. "My guys justifiably tell me that I am confused in my job, and that I should have achievements for the self-employed and not just for employees," he said. Talmon earlier supported the mandatory pensions agreement and a series of new labor laws.

Federation of Israeli Chambers of Commerce president Uriel Lynn said that he also supports gradually raising the minimum wage to NIS 5,000 gross a month, but that he will not condition his consent on any demands. "The time has come to compensate these people who have always been pushed around, and for whom reasons were always found not to raise the minimum wage for them," he said.

"I've never understood why it's so easy to organize MKS against raising the minimum wage, why it's so easy to exercise coalition discipline on this issue. I reject the arguments that raising the minimum wage will create unemployment. We had a good decade of economic growth, and out of national responsibility we ought to care for the poor, and close, once and for all, even by a bit, social gaps." Lynn himself owns a temp agency.

While Lynn and Talmon publicly support raising the minimum wage, Brosh, who represents Israel's largest employers, has always opposed the measure. Nonetheless, he is expected to support the pending modest and graduate increase, especially when it is compared with the original bill proposed by MK Amir Peretz (Labor) to raise the minimum wage from the current NIS 3,850 per month to NIS 4,600 in three jumps over 15 months. The ministerial legislative committee supported Peretz's bill in May, against the Ministry of Finance's position, but the Knesset plenum voted it down after the government imposed coalition discipline.

At the time, Eini was criticized for saying that he supported raising the minimum wage through agreement rather than by legislation, which allegedly damaged the chances of Peretz's bill.

Peretz himself once said that he supported an initial minimum wage hike of NIS 250, and only after a review of its effect would a decision be taken whether to make additional increases. The pending compromise between the Histadrut and the employees thus appears to closely resemble Peretz's proposal, except on one fundamental point: Peretz submitted his bill without first obtaining the support of employers, whereas the current deal has wide consent. Brosh will reportedly demand a package of benefits for employers, especially for members of the Manufacturers Association of Israel, which avoid nightmarish scenarios in which employees, especially in low technology industries, lose their jobs.