The minimum wage hike ordered by Prime Minister Benjamin Netanyahu in December is set to take effect on April 1, raising the minimum wage in Israel from 4,300 shekels ($1,081) to NIS 4,650 ($1,169). The increase is part of a plan to raise minimum wage in Israel to NIS 5,000 ($1,257) by late 2017. Netanyahu had ordered the plan's implementation after negotiations with Histadrut labor federation Chairman Avi Nissankoren and then-Manufacturers Association President Zvika Oren. Under the agreement, the pay raise will be implemented in three increments: The first taking place on April 1; the second set for on August 1, when minimum wage will increase to NIS 4,825 ($1,213); and the third planned for January 1, 2017, when minimum wage will amount to NIS 5,000. April's raise will be in effect for employees earning up to NIS 4,300, and will exclude those earning NIS 4,650 and over. The agreement also includes a series of minimum wage-linked increases in disability and mobility benefits, which will amount to NIS 4,630 ($1,164) as of April 1. Following Economy and Trade Minister Naftali Bennett's decision to issue an extension order for the minimum wage hike, public sector employees are also expected to receive the raise. The banking and insurance sectors have chosen to install the full wage hike immediately, raising minimum wage for their employees to NIS 5,000 effective April 1. The Finance Ministry believes the wage agreement will cost the economy some NIS 1.3 billion ($330 million) a year. On Monday, however, Nissankoren and current Manufacturers Association President Shraga Brosh announced they plan to demand yet another increase to minimum wage, to NIS 5,300 ($1,333), which they would like to see come into effect in December 2017. The move has no legal bearing on the planned wage hike, nor can it be enforced on businesses at this time, as it represents an independent agreement between the Histadrut and the Manufacturers Association. Both have also agreed to formulate a plan to increase the economy's productivity, which is among the lowest in the Organization for Economic Cooperation and Development. As part of the plan, a special mechanism of incentives and remuneration will be introduced that will calculate the minimum wage in various sectors according to their productivity. "Five months ago, when I announced the plan to raise minimum wage by NIS 1,000 ($251), many were surprised. Today we are all here to show that it's possible, and that no Israeli is doomed to be part of the working poor," Nissankoren said in a statement Monday. "The Histadrut and the Manufacturers Association have come together to change national priorities and to help 700,000 families in Israel," he said. Finance Ministry officials refused to comment on the fourth-phase wage hike proposed by Nissankoren and Brosh, with one official saying, "We'll have to wait and see." Several MKs and Finance Ministry economists involved in the current increase plan, however, criticized the announcement as "a step backward."
