The Manufacturers Association of Israel reported a third quarter drop of 5.6%, on an annualized real term rate, in salaries in the high-tech sector. It was the steepest drop in five years.
In the third quarter of 2008, the average monthly salary in the high tech sector was NIS 16,527. Overall, in industry in general, the average salary in the third dropped 2.8% in real terms, reaching NIS 11,035 per month, which is still nearly three times the minimum wage.
Manufacturers Association Economic Research Department director Daphna Aviram-Nitzan said that the drops in salaries are expected to continue in 2009 as well.
According to Aviram-Nitzan, "2008 as a whole will show a drop of 1.5% in real terms of the average salary in industry". She expects that as industry slides into recession, resulting from lower demand and a credit crunch, decreases in nominal salaries will steepen, and there will be more layoffs.
Aviram-Nitzan pointed out that the decreases in salary began earlier in the year, and the pace has been quickening, from a 0.6% annual rate in the first quarter of 2008, to a 3.4% annual rate in the second quarter, and reaching 5.6% in the third quarter.
"Such sharp real-term drops in salaries have not been seen for five years", she said.
Published by Globes [online], Israel business news - www.globes-online.com - on December 28, 2008
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