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The Histadrut Chairman: "Approximately five months ago, when I announced the Histadrut's demand to increase the minimum wage by NIS 1,000 (equivalent to US$251.89), there were many who raised an eyebrow and there was also one who found reasons why this can never happen. Today we are all here to show that this is possible and that no working man in Israel is sentenced to be a poor man"

Avi Nissenkorn, the Histadrut Chairman, and Shraga Brosh, the Chairman of the Presidium of Business Organizations and the President of the Manufacturers Association, convened a press conference this week and announced that the minimum wage in Israel will increase to NIS 5,300 (equivalent to US$1,335.01) as part of agreements reached between the parties.

The news on another increment to the minimum wage comes just two days before the application of the first phase of the agreement, according to which the minimum wage will increase by NIS 350 (equivalent to US$88.16).

Recall that according to the layout agreed upon several months ago between the Histadrut and the employers and approved by a government decision, the second phase will be applied on August 1, 2016, when the minimum wage will increase to NIS 4,825 (equivalent to US$1,215.37) and the third phase is scheduled for January 1, 2017, when the minimum wage is expected to increase to NIS 5,000 (equivalent to US$1,259.45).

In the framework of the talks held in recent weeks between the Histadrut Chairman and Chairman of the Presidium of Business Organizations and President of the Manufacturers Association, it was agreed to change the minimum wage agreement. The linkage rate to the minimum wage will stand at 47.5% and in addition, compensation will be given for increasing the productivity in the economy. On December 1, 2017, a fourth phase will be added to increasing the minimum wage in which the minimum wage will be increased to NIS 5,300 (equivalent to US$1,335.01), NIS 1,000 (equivalent to US$251.89) above the minimum wage today.

In parallel, the parties agreed to formulate a joint program designed to increase the labor productivity in Israel, which is considered low in the OECD countries. In the framework of the program, a special mechanism will be built to reward employees and update the minimum wage system for the increased productivity.

The Histadrut Chairman, Avi Nissenkorn, said tonight: "Approximately five months ago, when I announced the Histadrut's demand to raise the minimum wage by NIS 1,000 (equivalent to US$251.89), there were many who raised an eyebrow and there was also one who found reasons why this can never happen. Today we are all here to show that this is possible and that no working man in Israel is sentenced to be a poor man".

Nissenkorn added: "The Histadrut, which continues to lead social change, joined hands with the Presidium of Business Organizations, in order to change the national priorities while positively impacting the lives of 700,000 families that already in the coming days will begin to feel the change. By the end of 2017 the minimum wage will rise by a quarter of its current height. This is an unprecedented rate which is an essential step in reducing social gaps and increasing equality. In addition, we agreed on a minimum wage system update, so that as the labor productivity will increase, it will be expressed in the minimum wage. The real solution to the labor market is increasing productivity."