The Minister of Labor against the freezing of the minimum wage: “Strongly opposes the harm to the status of workers, and in particular the minimum wage workers”

Labor Minister Yoav Ben Zur announced today (Wednesday) that he strongly opposes freezing the minimum wage in Israel, in accordance with the plan announced by the Finance Minister yesterday. The National Insurance is also opposed to the intention to freeze the update of allowances.

“The responsibility for the well-being of the millions of workers in Israel rests with me as the Minister of Labor, and I strongly oppose harming their status, and in particular the status of workers who earn minimum wages,” Ben Zur clarified, adding that since the beginning of his term he has already signed two orders to raise the minimum wage in Israel in accordance with the provisions of the Minimum Wage Law. According to him, he intends to sign the increase of the minimum wage one more time also at the beginning of April 2025, in accordance with the increase in the average wage in the economy.

The National Insurance clarified that according to the conclusions of the latest poverty report, more than 30% of households in Israel are already unable to cover their monthly expenses due to financial difficulties – approximately 11% have given up medical treatment, 6.8% have given up prescription drugs and -6.9% gave up a hot meal at least once every two days.

The National Insurance emphasized that the benefits system (transfer payments) are one of the most significant factors in reducing poverty among the families receiving the benefits. About two-thirds of families receiving a veteran’s pension would depend on it in 2022 to get out of poverty, as would 55% of families receiving a disability pension.

The National Insurance also emphasized that the reform of disability allowances, which ensured, among other things, that they be attached to the average salary and their regular update, caused a sharp decrease in the number of poor families receiving disability allowance. The poverty line in Israel is currently defined as an income of approximately NIS 3,076 per person (single) only. “The National Insurance is opposed to harming allowances for the disabled, the elderly, the nursing home, the unemployed, and the like,” the National Insurance announced today. “The cuts should be made from other sources and not the backs of the weak in society.”

The Minimum Wage Law states that the minimum wage must be updated every year at the beginning of April, in accordance with the update of the average wage announced on January 1 by the National Insurance (in accordance with the National Insurance Law). Many of the National Insurance benefits are also updated automatically in accordance with the National Insurance Law, which links them to the update of the average salary.

In order to avoid updating the minimum wage and allowances, the Treasury will be required to advance legislation to freeze the update of the average wage according to the National Insurance Law. For example, during the Corona period, the average wage update according to the National Insurance Law was frozen for two years, following an artificial increase caused by the departure of many low-wage workers to unemployment benefits.

Alternatively, the Treasury could try to promote legislation that would disconnect the minimum wage and allowances from the average wage. A similar move was previously made by Benjamin Netanyahu as finance minister in 2003. At the time, the move provoked a severe public struggle and social protests, and it took a long series of struggles over the following decades to reattach the allowances to the average wage – including the difficult struggle of the disabled, which also included many road blocks in 2017-2018.