Minimum wage in Israel to rise next week

Next week, the monthly minimum wage in Israel will be revised, and increases by 6 % to 6,248 NIS, which is NIS 367 compared to the current minimum wage. In April 2024, a similar height was also recorded.

While welcoming the rise, the Minister of Labor, Yuif bin Zor, stressed, “The minimum wages are good news for hundreds of thousands of workers in the economy.” However, this step carries risks. First of all, the high connection between the increases in wages, increased prices and inflation. Companies can transfer the increase in workers ’wages to consumers, making products more expensive for everyone.

The head of the market strategy at Li -Daily said that the main impact will be reflected, as expected, in sectors that have a high level of minimal workers in wages, “retail companies, food services and also health care services.” Indeed, the current recruitment market data indicates an economy in a state of full employment, with a 2.7 % unemployment. The vacancy rate is still high according to historical standards, indicating a greater need for employees. The average monthly wage for setting salaries at the end of 2024 was 13,514 NIS, an increase of 5.1 % from 2023.

Offer Klein, head of research at Harel Insurance and Finance, believes that the increase in wages mainly in terms of positivity. “This is a step aimed at reducing inequality,” he says.

Another advantage in private consumption will reflect. Employees who get the minimum wage tend traditionally to spend a larger part of their income on private consumption, and therefore a relative increase in the available income will allow additional spending on consumption. But Klein notes that high wages may also harm the local industry: “products imported from abroad become more attractive to manufacturing, so the competitiveness of the local population has been damaged.”

It was published by Globes, Israel Business News – En.globes.co.il – on March 27, 2025.

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