Treasury Warns on Raises as Gov’t Wages Rise 2.75%

Kobi Amsalem says trend of rising salaries for state workers cannot continue.

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Israeli currency, November 25, 2008.
Israeli currency, November 25, 2008.Credit: Bloomberg

The average wage in the public sector rose by 2.75% after inflation last year, maintaining the high pace of growth of recent years. But in releasing the Finance Ministry’s annual salary report on Tuesday, Wages Department director Kobi Amsalem warned that the trend could not continue.

The government cannot keep funding generous wage hikes in the public sector, which includes the civil service as well as state-owned companies and private organizations that rely on state support, he told a news conference.

The costs of Operation Protective Edge over the summer and slowing economic growth are expected “to affect the government’s policy on wage costs and work conditions,” Amsalem said.

The comment was a signal to the Histadrut labor federation to think twice before coming to the negotiating table with demands for pay hikes in 2015. Over the five years to 2013, civil service wages rose 12% and those in state-owned enterprises increased by 8%, compared to just 3% for the private sector, Amsalem noted.

As in past years, it was a physician who topped the list of public-sector wage earners, with an unidentified doctor heading a clinic somewhere in the periphery grossing an average of 124,365 shekels ($31,660) a month in 2013.

By employer, Haifa Port workers were the top wage earners, with an average monthly salary of 28,790 shekels before taxes. Workers at Ashdod Port, who have been in the news far more often because of their generous pay and conditions, earned slightly less — just 27,716 shekels a month.

Workers at state-owned companies, such as Israel Electric Corporation or the Mekorot water company, earned the most in the public sector, according to the report. Employees of local religious councils earned the least, but they did have a 14% wage hike last year.

All told, the wages report showed that public sector wages were still low, compared to the private sector — an average of 8,623 shekels a month versus 9,169 shekels. But over 2013-13, the public has been catching up, with wages in the public sector rising 1.02%, compared to 0.73% in the private sector.

Doctors in the public sector averaged 33,000 shekels a month, the most of any job category, while teachers made the least, at 8,800 shekels. Among public sector employees categorized as top wage earners, pay raises last year were especially high, reaching 5% to an average of 42,515 shekels a month, according to the report.

Women make up 58% of all public-sector employees, but in the local authorities, where pay is the lowest, they account for more than 80%. In municipal companies the gap between full-time female employees and their male peers is 3,100 shekels a month, a gap that increased to 6,166 shekels in government-owned enterprises.

The report found that most women who earn top salaries in the public sector are either spokeswomen or legal advisers — these categories account for just over half of all the highest-earning women in the public sector — but further up the ladder, women are underrepresented. They accounted for just 5%-7% of all top managers or directors at government-owned companies.

Amsalem declined to comment on the issue of expanding the higher minimum wage to the public sector, as Prime Minister Benjamin Netanyahu proposed this week. But he did note what he called “distortions” in the way the way the minimum wage is calculated.

About 40% of all civil servants are eligible for income support — that is, welfare — due to their low base sal aries, but that leaves them with an average gross monthly wage of 11,786 shekels, far more than the national average.

“The distortion is due to rules in the Minimum Wage Law, which exempts additional payments in the salary such as for seniority, overtime, additional assignments and the ‘13-month salary,’” Amsalem said.