Israeli cabinet approves minimum wage hike

The minimum wage will rise to 5,000 shekels ($1,269) a month from 4,300 in four stages beginning in April, with an increase to 4,650 shekels and ending at the start of Jan. 2017, the Finance Ministry said.

Only those with below-average salaries will receive the raise, it noted.

The approval came after discussions with Israel's justice ministry and attorney general since new laws are traditionally not submitted for ratification during an election campaign. The government collapsed in early December and parliament was dissolved to make way for a new election on March 17.

The finance ministry said the government will act to complete the legislative process as soon as possible.

The cost of living has topped the domestic political agenda since 2011, when hundreds of thousands of Israelis took to the streets in protests sparked by the rising price of cottage cheese, a popular staple.

A government survey in June found that 4 in 10 Israelis are not able to make ends meet and 47 percent are not satisfied with their economic situation.

A basket of basic products was 12 percent more expensive in Israel than the OECD average last year, according to the Bank of Israel, while gross salaries are $10,000 lower. While Israel's consumer price index rose 23 percent in the past 11 years, food prices jumped 39 percent.

Last month, the Histadrut labour federation, the umbrella organisation for 700,000 mostly public sector workers, signed a deal to boost the minimum wage to 5,000 shekels a month in three phases by 2017.

The Histadrut in late November had threatened a general strike if the minimum wage was not raised.

($1 = 3.9399 shekels)

(Reporting by Steven Scheer; Editing by Tom Heneghan)