Tuesday, July 23

The minimum wage in Israel has not increased: reasons for the delay

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The minimum wage in Israel was supposed to increase back in April, but so far there have been no changes

In March of this year, the Israeli Finance Ministry announced that the minimum wage would be revised, but since then the amount has not changed. The reason for the delay is the fact that the draft requires additional amendments and approval in the Knesset.
A government group is now consulting and gathering information in order to make changes and submit a final version of the law for consideration. Israeli expert Gad Lior assumes that the new version will be developed taking into account the current economic situation in the country and the world as a whole. This primarily concerns the growth of inflation and the increase in the key interest rate from the Central Bank. They have caused the rise in prices of various groups of goods, which is observed in the local market.
The Ministry of Finance is also inclined to combine the two minimum wage increases into one phase. Initially, officials planned to increase the rate by 100 shekels this year and by a similar amount next year. But now they have decided to raise the wage by 200 shekels at once.

minimum wage

There is yet another obstacle in the way. The coalition lost its majority in the Knesset, which casts doubt on its ability to make any legislative changes. In addition, the finance minister considers the revision of the minimum wage inappropriate now, despite the fact that the process has been agreed upon with the government, business representatives, and trade unions.
In February this year, the government agreed on changes to the minimum wage. It was to rise to 6,000 shekels, and its increase was divided into several phases to be completed in 2025. In the spring there was to be an initial phase of a 100-shekel increase, which would have resulted in a wage of 5,400 shekels.
The process of revising the minimum wage is not only observed in Israel. For example, in the European Union, the rate increased to 12.5 euros per hour, which is comparable to 45 shekels. A number of U.S. states have also made changes to wages. Here an hour of work is valued at $15, or 47 shekels.
Unions and individual officials have repeatedly insisted that the minimum rate be revised. They demanded that the hourly wage be raised to NIS 40. However, during lengthy negotiations, they were able to agree on an increase to 29 NIS per hour. However, this rate has not yet been implemented either. The government is not prepared to take such an important step, fearing that it would have a negative effect on the country’s economic situation.


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