Last week, for the first time, the annual labor report (for 2024) published by the Israel Ministry of Labor included data on employment by the hour. According to the report, based on Central Bureau of Statistics manpower surveys, a large proportion — about a third of the total workers in Israel – 915,000 individuals — are employed on an hourly basis!

As the report itself states, this is hurtful employment: persons employed on an hourly basis earn less than those paid by the month, they have significantly fewer social benefits and it is easy to let them go.

The report is especially relevant today, as the compensation for workers adversely affected by Israel’s war with Iran is based on that implemented during the Gazan war and Corona epidemic, which neglects workers employed by the hour. In cases in which their working hours were reduced, they were not eligible for any compensation.

The median hourly pay for workers employed by the hour is NIS 48, compared with NIS 85 for workers employed on a monthly basis. Some 55% of workers employed by the hour have full-time jobs (defined by the Central Bureau of Statistics as at least 35 hours a week), and their salaries — NIS 46 per hour — are even lower than the average for workers employed part time. Moreover, in all the occupations included in the report that include a large percentage of workers paid by the hour, the workers earn less than workers paid by the month.

The highest proportion of workers paid by the hour can be found among waiters and barmen – 92%. As these are occupations in which mostly young people and students are employed and they involve high turnover, pay by the hour may be justified. However, other occupations in which hourly pay is common do not involve young, temporary workers and high turnover. The reference is to nursing care workers, most of them older women, 80% of whom are paid by the hour; cleaners, (75% of them employed by contrastors and paid by hour); transport and storage workers, mostly men, 70% of whom are paid by the hour; salespersons (66% paid hourly), as well as 60% of salesclerks in stores and 56% of nursery school aides.

Employment by the hour is justified as “flexible employment”. However, due to the extent of its usage, it has become a common method of employment that involves low wages and avoids the payment of proper workplace social rights. As expected, it is utilized for workers with low bargaining power, most of whom have a low level of education and are devoid of occupational skills — workers that include a high representation of Arabs and young people (23% of each). However, hourly employment is not limited to these social groups: Amongst hourly employees, 34% are parents of children up to the age of 14. This constitutes a huge proportion of wage earners working without employment security or a fixed number of hours.

Finally, the employment sectors in which hourly pay has taken root are also characterized by difficulties in recruiting workers – among them nursing care workers and teaching aides. These employees vote with their feet, frequently seeking more stable employment. Thus, public services suffer as well as employers, as the latter forego employment stability in favor of the financial gain they expect from cheap labor.

As it turns out, the situation is dismal: Employment by the hour has become a widely used method for simply reducing the cost of labor.  It is harmful, exploitative and unethical, and in the long run not necessarily economically advantageous. Due to the frequency of the use of employment by the hour, it is high time for Israel to pass a law limiting it to part-time or temporary jobs.