Labor proposes taking Israel back to social-democrat economy
According to the economic pre-election agenda presented by Labor head Amir Peretz, the party wants to increase Israel's external debt in order to pay for social projects.
Few parties in Israel have presented an economic plan as part of their campaign for the September elections. And so it is to the credit of the Labor-Gesher party to have actually provided a comprehensive and detailed economic program. The problem is that this economic program, for the most part, offers a social-democratic-style economic platform. And the likelihood of such a platform being implemented in Israel of today is almost nonexistent.
The cost of this “socially-oriented economic program” is 30 billion shekels ($8.5 billion) per year, which will be invested in what are called “social targets.”
Among these targets is an increase in the hourly minimum wage from less than 30 shekels ($8.50) per hour to 40 shekels ($11.30) per hour, or in other words, an increase of about 35%. In a conversation with Al-Monitor, Labor-Gesher leader Amir Peretz said that the increase would be a net total benefit to the state, since workers pay income tax and social security on it, while what is left will be spent in the market, increasing consumption and therefore promoting growth.
Another ambitious item is a complete halt on hiring through employment offices, or employment contractors as they are often known. The main criticism of this initiative is that it would prevent flexible employment and keep private and public employers alike from shifting employees around, hiring temps, and so on.
