Up the Minimum Wage

One million women and men in Israel are earning the minimum wage. Most of them are women, Arabs, Ethiopian immigrants and from other weakened population sectors.

The truth is that it seems to me really trivial to write about raising the minimum wage. In what world is it necessary to defend the notion that when a woman or a man works full-time she or he should be paid a living wage? However, it again seems that not everyone shares this view and therefore, in the renewed struggle in the wake of the law proposed by Labor MK Amir Peretz, there is a need to write the obvious. So yes - it is absolutely necessary to raise the minimum wage.

Finance Minister Yuval Steinitz's arguments are not new: It is a burden on the national budget, it is a burden on employers, companies will flee abroad, it will cause prices to rise, it will also lead to dismissals and make it difficult for the unemployed to return to employment.

Nor are the arguments of the supporters of the raise new, but there is no way to avoid repeating them: Increasing the minimum wage in fact helps the local economy because another NIS 750 a month to someone earning the minimum wage means consumption of more local food, education and recreation, as compared to another million to a wealthy person, which will be directed to expenditure or investment abroad.

Most of the poor families in Israel headed by people of working age are working families earning the minimum wage. According to the Adva Center, between 2000 and 2009 the national income increased by 30 percent. However, while the workers' share grew by only 17 percent, the employers' share grew by 59 percent. Specifically in 2009, the employers' share of the national income increased from 15 percent to 17 percent, while the employees' share decreased from 62 percent to 60 percent.

At the Adva Center they did the arithmetic: In 2009 Israel's national income stood at NIS 654 billion. If the employees' share had been 66 percent, as it was in 2000, and not 60 percent, every worker would have received an additional NIS 1,083 per month. So apparently the employers are indeed able to shoulder the burden.

The facts, too, insist on confusing us: In 2007 the minimum wage increased from NIS 3,230 to NIS 3,850, unemployment declined slightly, growth was not harmed and that was the only year in the past decade in which the number of workers below the poverty line decreased.

However, there is also another important truth hiding behind this struggle: One million women and men in Israel are earning the minimum wage. Most of them are women, Arabs, Ethiopian immigrants and from other weakened population sectors. Thus, the minimum wage is in effect a euphemism for discrimination, oppression and humiliation of those who have no way to come out against the people with power.

A significant increase in the minimum wage is an opportunity to amend basic discrimination and make gender and sectorial changes in Israel, but the government and the wealthy have no interest in this. On the contrary, they have an interest in maintaining the existing situation. Therefore, every time the possibility arises of paying these women and men more, the same objections based on the same threats and economic scaremongering are repeated.

In this context, Dr. Daniel Gottlieb, head of research and planning at the National Insurance Institute, said in an interview: "In economies where fairness is an integral part of the work life, there is no need to pass such laws. Thus in Sweden, for example, the poverty rate is very low and the labor market does not need a minimum wage law in order to ensure fairness and a minimum decent living."

As they say here, we aren't Sweden. Therefore it is essential to pass the legislation to increase the minimum wage - and urgently.