The economic left is right - the state should work for the welfare of the poor, and especially the working poor.
Israel is an advanced Western country, and it can afford welfare.
The economic right is also right - the minimum wage has a heavy price.
To understand it one has to get into the minds of employers.
Wage costs will push employers to raise prices, which will lead to inflation.
Others will reduce shifts or workers, and some businesses will simply close.
Because of employment costs, many others will not be able to find work.
The Taub Center published a study in 2006 on the impact of the minimum wage on uneducated adults.
In periods of low inflation and high growth, raising the minimum wage is not visible in government statistics.
Business brackets and price increases become transparent.
In times of high inflation and instability like today, raising the minimum wage can lead to an inflationary spin.
In Israel, there is also the Israbloff phenomenon.
Wages of tens of thousands of public sector workers are linked to the minimum wage.
"Thanks" to the Histadrut, workers receive a base salary of NIS 2,500, receive a supplement of at least NIS 5,000, and in addition additions of thousands of shekels.
With the help of this Israbluff, government officials from the top decile will receive a salary increase.
This addition comes out, of course, out of the pockets of the transparent who are harmed by the minimum wage;
They are forced to both eat the stinking fish and also be expelled from the city.
On both sides of the political barricade there is a deaf discourse, with both the left and the right arguing around a solution from the previous century: minimum wage.
In the early 20th century, the only thing the government could do was heavy and criminal regulation.
The minimum wage is dental care with an iron hammer.
The right solution is called a "negative income tax" or a "work grant," and it was developed in the 1960s by Nobel laureate Milton Friedman and operated in Israel on a limited basis.
In the Labor Grant Program, the state pays the difference between the wage paid to the employee and the subsistence wage with dignity.
In such a situation, the small employers, who employ most of the economy, will be able to survive and maintain low price levels, which will stabilize inflation and keep unemployment low.
Under certain conditions, a negative income tax can even increase employment.
The work grant is not without challenges: its implementation requires an efficient bureaucratic system, which will be possible with the computer revolution in government ministries.
The remaining major challenge is political.
Unlike right- and left-wing economists, who understand that a work grant is far more effective than the minimum wage, politicians refuse to understand this, because of populism.
High minimum wage is beautifully photographed.
Politicians can deliver speeches, and a round number like 40 looks beautiful on signs of young protesters.
The political tie can be broken if the economic right understands that people in a democracy prefer welfare over maximum economic efficiency, and the left understands that sometimes the right policy to increase welfare is not the populist and vociferous policy.
A broad consensus can be reached on the right policy, and it is called an employment grant.
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