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Who did you call average?
This week it was announced that the average wage in the economy fell in April by 6.9%, to NIS 11,661.
But what exactly is an "average wage" and how is it calculated?
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The average wage in the economy
CBS
Restaurants
Waiters
employment
Tzachi Shtrax, VP of Service and Banking at Pepper
Friday, 09 July 2021, 08:29 Updated: 08:45
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Every month, the Central Bureau of Statistics (CBS) publishes data on the average wage in the economy. Here, just this
week it was reported that the average wage in the economy fell in April by 6.9%, to NIS 11,661.
On days like this, such a decrease in the average wage in the economy could indicate the direction of a deep economic recession. but this time, the main reason for this is actually re-opening of the economy following the removal of restrictions origin and return to work of salaried employees is relatively low. this is also a good opportunity to understand the national average wage, how it is determined and why it is important.
We'll start that A bit strange: in Israel, there are two bodies that publish the average wage in the economy, each for its own purposes and uses: the National Insurance Institute and the Central Bureau of Statistics (Central Bureau of Statistics).
The "average wage in Israel" (or "the average wage in the economy") is determined by the National Insurance Institute and is updated once a year.
It is calculated according to the average wage per employee post in the last three months, plus a cost increase (which is already a concept in itself, but in law: a supplement paid in light of the rise in product prices in the economy).
The index is also used to examine the state of the economy and employment in Israel, according to which various rights and obligations are calculated and determined.
Thus, for example, the average wage serves as a basis for calculating the minimum wage paid to workers in Israel, the salaries of senior executives in the public sector, and is also a tool used to calculate income ceilings, benefits and grants.
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What does the calculation of the average wage include?
As of January 2021, the last time this index was published, the average wage in Israel was NIS 10,428, for the purpose of updating the minimum wage and the salaries of executives, and NIS 10,551 for calculating entitlements and debts.
As mentioned, the Central Bureau of Statistics calculates and publishes the "average wage per employee post". The name is similar, but there are differences.First, this figure is published once a month and represents data on the average wage per employee post.Calculate it by adding all the gross salaries of employees paid that month, and the result is divided by the number of employee jobs that month.What
does the calculation include? data such as basic salary, allowances, leave, overtime, travel, recreation, car allowance, holiday gifts and more. it does not include payments to pension funds, education funds, national insurance or health tax, direct taxes and severance pay.
In April 2021, stated, The average wage per employee post was NIS 11,661 - a decrease of 6.9% compared to March this year, and a decrease of 7.4% compared to April 2020.
The cause of the drop in the average wage: Opening of restaurants and cafes in March and April (pictured: "Nimrod" on the day of reopening) (Photo: Reuven Castro)
Not only high-tech, but also waiters
So what happened in April that led to this sharp decline? We may have forgotten that exactly a year earlier, in April 2020, the economy was in a quarantine and hundreds of thousands of people were expelled. Today, the economy is in a significant recovery trend.
What happened is at the height of the corona crisis, especially higher-than-average. Tech - continue to work, while the most affected occupations are in sectors where wages are lower than average - for example the hotel and hospitality sector.
As a result of workers in low-wage occupations leaving the labor force, the average wage was higher. The
curious among you can also see the index in the segmentation by various industries: high-tech, communications, education, hospitality and food services, finance and insurance, management and support services, entertainment and leisure arts and more. The
author, Tzachi Shtrax, is VP of Service and Banking at Pepper
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