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In a highly surprising move for a manufacturer, Manufacturers Association president Shraga Brosh declared that the minimum wage should be raised.

Nobody can live decently on the minimum wage of NIS 3,335 a month, Brosh said at a conference in Eilat on Friday morning.

The minimum wage should be gradually increased, Brosh told the audience at the meet, which was devoted to social and economic affairs.

Speaking at a panel on labor relations, in which Histadrut labor federation chairman Ofer Eini also took part, Brosh's words demonstrated that the positions of manufacturing and the unions are coming closer. The first harbinger of warmer relations was a year ago, when the ports reform managed to pass without a strike.

Brosh and Eini also agree that the courtroom is not the optimal venue to solve labor disputes, nor is legislation the answer. The answer lies in collective employment agreements.

The Manufacturers Association and uber-union announced at the conference that they will be launching a joint panel to handle labor disputes, in order to minimize the frequency of strikes.

Eini spoke words of praise for the Manufacturers Association under Brosh's hand: "It has become relevant since it has stopped automatically supporting the government in disputes between it and the trade unions," Eini said. "From now on, labor relations will be handled by discussion, not legislation, which creates a dependency on the political game."

The labor leader added that he would do everything in his power to prevent strikes, but in parallel, he said, he would fight with all his might to improve employment terms.

Brosh for his part said the average wage in industry was almost three times higher than the minimum wage, reaching NIS 9,500 a month, which was NIS 2,000 above the general average wage, he added.

"We must enforce labor laws, especially the minimum wage law," Brosh said. "A company that fails to pay its workers at least the minimum wage, hurts other businesses and impairs fair competition, because it's operating on unequal terms."

Brosh said the issue of social gaps was also weighing on the manufacturers, who had therefore decided move dozens of plants from central Israel to the unemployment-stricken Negev and Galilee areas. "We received 75 acres around Netivot and have budgets to train workers for the plants," Brosh said.

He projected that unemployment would continue to drop, to 8.6% by the end of 2006, compared with 9% in 2005. He also believes that participation in the workforce, a weak point in Israel, will creep up to 55.6% of the adult population, compared with 55.2% at present.