Shlomo Eliahu, controlling shareholder in Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), Israel's largest insurance group, announced today that he would increase the minimum wage for the company's employees by NIS 1,000 to NIS 5,300, effective in January.
Eliahu announced the initative in a press conference, in view of the Histadrut's (General Federation of Labor in Israel) battle to raise the minimum wage to NIS 5,300. He did not disclose the number of company employees receiving the minimum wage, but noted that Migdal had hundreds of employees receiving the minimum wage. He also did not mention the cost of the measure, saying, "Neither I nor the company needs this money, which the employees deserve."
"The state of poverty is shameful. It's simply immoral to continue the same way in silence," Eliahu remarked. "The politicians talk a lot about defense and economics, but they forget the human being, who should be the most important thing. A minimum wage of less than NIS 5,000 is a disgrace. If I were younger, I'd demonstrate in the streets."
Eliahu added, "I expect other companies to follow suit, and ask anyone who's listening not to be indifferent to the problem of his employees. Don't wait until they decide for us. Very large companies should give a proper wage to those who need it, instead of making donations to the community. I call on other boards of directors and employers to make a similar decision."
The Ministry of Finance objected to the Histadrut's demand for a 25% increase in the minimum wage, saying that it would serve the interests of those earning high pay, rather than those of low-paid workers.
As an immigrant to Israel from Iraq, Eliahu grew up in a tent camp. He started his career as a messenger boy at Migdal in 1951 (he was fired by the company), becoming an insurance agent, then acquiring control of a small insurance company, and becoming Migdal's owner in 2012. He is also an ex-Knesset member, who dealt more than once with the issue of poverty.
"I've been through enough in my life, and have gone through a lot of changes from poverty to riches. When I read in the newspaper that they were setting up a committee to raise the minimum wage, and arguing about a few hundreds shekels, it made me recoil in horror, and reminded me of my childhood. As a businessman and member of society, I say that the game of committees and teams for talking and giving NIS 200 or NIS 300 to a family with a mortgage and municipal property tax to pay is a very hard game.
"What I say doesn't mean anything, but what the Migdal group does should become a bandwagon. Migdal has been insuring almost a third of Israelis for over 80 years. I think that if I have been privileged to control the company, then the group will not be indifferent. There was a board of directors meeting yesterday at Migdal and Magal Insurance to approve the financial statements. I put the item on the agenda, and my request to implement the NIS 5,300 minimum wage starting in January 2013 was approved.
"I'm aware that I'm getting into things that are none of my business, and that there are teams that will set the minimum wage, but I'll tell you one thing: I don't know how you can live on NIS 5,000 a month. In my generation, there was someone who took care of poor people, and gave meals to those who couldn't pay for food, and we got aid and meals. The state had nothing back then, but it took care of the people, and did as much as possible for them, even though it had no money - in health and so forth. There's one thing that's hard for me to accept as an Israeli. It's not acceptable that we're part of the global village and want to appear everywhere outwardly as righteous people, or leaders, when inwardly there's no thought devoted to the average person, the immigrant, when he needs help. There are newspaper headlines, but it can't be helped - the elected politicians are always the ones who make the decisions.
"What difference does another NIS 3 billion or NIS 4 billion make? Let's see what the needs are. The working man doesn't want handouts; he wants the minimum he needs to feed his family. There's no difference between a family or person with nothing and a family that has everything. Needs are needs. I find the current situation unacceptable."
Published by Globes [online], Israel business news - www.globes-online.com - on November 26, 2014
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