General strike could harm Israel's already struggling economy

By Steven Scheer JERUSALEM (Reuters) - Israel faces its first nationwide strike in nearly three years next week in a dispute over the minimum wage, action that would put the economy at renewed risk after it took a big hit from the July-August war in Gaza. Officials from the finance ministry and Histadrut -- the umbrella organization for 700,000 public sector workers -- have been meeting to avert a strike scheduled to begin on Dec. 7. If it goes ahead it is likely to shut down the airport, seaports, trains, the stock exchange and dozens of government services, at a cost of up to $500 million a day. The Histadrut is demanding the minimum wage be increased to 5,300 shekels ($1,355) a month from 4,300. The finance ministry has said it is prepared to raise it, but indications are it will not go beyond 5,000 shekels. A spokesman for Histadrut, which has plastered the country with billboards, said some progress had been made in talks but that the walkout would go ahead. Negotiations are being held as a split in the ruling coalition ushers Israel towards new elections. The last strike, a three-day stoppage in early 2012, cost the economy some 6 billion shekels ($1.5 billion) and ended with a new wage package for low-earning contract workers. Israel's economy contracted an annualized 0.4 percent in the third quarter following the 50-day war between Israel and Hamas militants in Gaza. It is forecast to grow 2.2 percent this year, sharply down from 3.2 percent in 2013. A strike "certainly can knock something off of growth, especially if it drags on," said Barclays economist Daniel Hewitt, although he said a two-day stoppage would not derail the economy. While Israeli media have reported that the finance ministry is willing to raise the minimum wage to 5,000 shekels a month, a ministry spokeswoman said nothing was final. She said the ministry was willing to give raises to those truly making the minimum wage but that only a small percentage of civil servants actually earn the minimum. According to the Organisation for Economic Co-Operation and Development, Israel's real minimum wage was the 12th highest among 25 countries in 2013. In dollar terms, it was $14,291 a year in 2013, just behind the United States' $15,080. Israel's cost of living is high, however, and has lead to widespread protests in recent years. (Reporting by Steven Scheer; Editing by Luke Baker and Catherine Evans)