The current minimum wage is about $750 a month and Labor party chairman Amir Peretz made an election promise to increase it to $1,000 by September. Kadima was not initially in favor of raising salaries, but has agreed to establish a committee to meet Labor's demands over a four-year timetable.
Most economists have come out against raising the wage to $1,000 a month, but there is an apparent conflict within the Bank of Israel, which issued a special press release this past week supporting a gradual rise in the minimum wage. Statistics show that worker productivity grew 10 per cent in the past two years while the minimum wage was frozen.
However, Bank of Israel Governor Stanley Fischer categorically stated he is against boosting the minimum wage. He charged that increasing the wage "would actually hurt, first and foremost, the poor people who need work more than anything and experience difficulties finding it." Fischer also is against restoring child allowances, a demand made by the Shas Sephardic party.
The minimum wage law is barely enforced and a substantial number of workers earn less than the minimum because of employers' deductions. Almost 325,000 full-time wage earners receive less than the minimum wage, and about 200,000 workers earn less than half of the wage.
Enforcement of the minimum wage law is a key issue. Ensuring the salaries are paid falls under the jurisdiction of the Ministry of Trade, Industry and Labor, a portfolio currently held by Interim Prime Minister Olmert. During Olmert's reign as Labor Minister, the number of inspectors ensuring compliance with the wage law were slashed by more than two-thirds to 20.
Labor party leader Peretz has frequently spoken about the minimum wage in theory, but in practice, a large number of workers have not enjoyed any benefits. As longtime leader of the powerful Histadrut national labor union, he staged numerous strikes on behalf of port and electric company workers, whose wages and benefits are far beyond the average Israeli salary. However, the "little guy" has been left with a minimum wage that was frozen for two years until this month's 3.5 percent hike.
Uriel Lynn, president of the Federation of Israeli Chambers of Commerce (FICC), said he is in favor of raising the wage to 4,000 shekels a month within a year, which amounts to about $870. Significantly, he added that the minimum wage should be the take-home earnings and not the salary before deductions.
The main fear of an immediate rise is that the 2006 budget deficit, which has not yet been passed, will burst beyond the limits set by the United States as a condition to receive aid. A rise in the minimum wage to $1,000 per month would cost the government over $660 million.
Most economists have come out against raising the wage to $1,000 a month, but there is an apparent conflict within the Bank of Israel, which issued a special press release this past week supporting a gradual rise in the minimum wage. Statistics show that worker productivity grew 10 per cent in the past two years while the minimum wage was frozen.
However, Bank of Israel Governor Stanley Fischer categorically stated he is against boosting the minimum wage. He charged that increasing the wage "would actually hurt, first and foremost, the poor people who need work more than anything and experience difficulties finding it." Fischer also is against restoring child allowances, a demand made by the Shas Sephardic party.
The minimum wage law is barely enforced and a substantial number of workers earn less than the minimum because of employers' deductions. Almost 325,000 full-time wage earners receive less than the minimum wage, and about 200,000 workers earn less than half of the wage.
Enforcement of the minimum wage law is a key issue. Ensuring the salaries are paid falls under the jurisdiction of the Ministry of Trade, Industry and Labor, a portfolio currently held by Interim Prime Minister Olmert. During Olmert's reign as Labor Minister, the number of inspectors ensuring compliance with the wage law were slashed by more than two-thirds to 20.
Labor party leader Peretz has frequently spoken about the minimum wage in theory, but in practice, a large number of workers have not enjoyed any benefits. As longtime leader of the powerful Histadrut national labor union, he staged numerous strikes on behalf of port and electric company workers, whose wages and benefits are far beyond the average Israeli salary. However, the "little guy" has been left with a minimum wage that was frozen for two years until this month's 3.5 percent hike.
Uriel Lynn, president of the Federation of Israeli Chambers of Commerce (FICC), said he is in favor of raising the wage to 4,000 shekels a month within a year, which amounts to about $870. Significantly, he added that the minimum wage should be the take-home earnings and not the salary before deductions.
The main fear of an immediate rise is that the 2006 budget deficit, which has not yet been passed, will burst beyond the limits set by the United States as a condition to receive aid. A rise in the minimum wage to $1,000 per month would cost the government over $660 million.