Sharp increase in wages of non-Israeli workers will be inflationary

ISRAEL - In Brief 05 Mar 2024 by Jonathan Katz
Sharp increase in wages of non-Israeli workers will be inflationary In January, average wages among Israeli workers rose 5.9% y/y, moderating from 9.1% a month ago. In January, there was an increase of 0.6% in the number of employee posts, apparently at low wage levels (which lowered the total average wage). From September 23, the number of Israeli jobs dropped by 72,000 (until January), mostly evacuees from the north and south. The number of jobs of non-Israeli workers (reported) declined by 112,000. Due to the shortage of non-Israeli workers (mainly Palestinians who are not permitted into Israel since the war), their average wage in January increased by 18% compared to January last year. The shortage of workers (mainly in the construction industry) and the increase in labor costs of non-Israeli workers are inflationary factors, as noted by the Bank of Israel in the last interest rate announcement.

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