Finance Minister Yuval Steinitz
Finance Minister Yuval Steinitz. Photo by Moti Kimche
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Finance Minister Yuval Steinitz announced yesterday that he is prepared to consider increasing the minimum wage, but wants to examine the implications for the economy first.

Speaking at the annual meeting of the Manufacturers Association in Tel Aviv, he revealed that a task force comprised of representatives of the Finance Ministry, private employers and the Histadrut labor federation had already been appointed to develop recommendations on the minimum wage. The recommendations will be aimed at reducing wage disparities without harming industry, inflating the state budget or increasing the unemployment rate.

This approach represents a change in the finance minister's stance. Initially, Steinitz had expressed opposition to the agreement struck two weeks ago between Histadrut chairman Ofer Eini and Shraga Brosh, who chairs the coordination office of the Federation of Israeli Economic Organizations.

That agreement called for the minimum wage to be hiked in two installments. In July of this year, it would rise by NIS 250, to NIS 4,100 a month, and in October 2012, it would increase by another NIS 200, to NIS 4,300. But until now, Steinitz had warned that increasing the minimum wage would force employers to lay off workers, thereby increasing unemployment.

Eini told the gathering that though he is in favor of the Histadrut's participation in Steinitz's task force on the minimum wage, Industry, Trade and Labor Minister Benjamin Ben-Eliezer should meanwhile continue the process of expanding the Eini-Brosh agreement on the subject so that it would apply to the entire work force.

Ben-Eliezer, for his part, welcomed Steinitz's softened stance on increasing the minimum wage. At TheMarker's Israel 2021 conference in Jerusalem earlier this week, Ben-Eliezer said he would sign an order expanding the reach of the Eini-Brosh pact on the minimum wage.

Commenting on the weakness of the dollar against the shekel, which hurts exports by making Israeli products more expensive in dollar terms, Steinitz said Bank of Israel Governor Stanley Fischer had acted correctly by intervening in the foreign currency market. The Finance Ministry, he continued, also took its own steps to ease exporters' woes by dramatically cutting corporate taxes.

A joint committee of the Finance Ministry and the manufacturers would soon come up with additional measures, he pledged.

Brosh, who is also president of the Manufacturers Association, sounded the alarm at his organization's annual meeting. Israeli exports have sagged over the past three quarters, output has stalled and new employees are not being hired in industry, all because the dollar has declined to an exchange rate approaching NIS 3.50, he said.