JERUSALEM (Jul. 15)
Salaries throughout Israel will rise by six to 16 pounds a month beginning tomorrow, it was officially announced here today. The increase results from labor-management contracts which pegs the cost of living bonuses to the government computed cost of living index.
The increases granted for a six-month period beginning tomorrow are computed on an index of 258–with September 1951 as the base of 100. However, heavy government subsidies for necessities whose prices go to making up the index, reduced the index during May and June from 270. Otherwise the increases would have been much greater.
Since wage increases are granted only on a six-month basis, the government can save money by withholding subsidies until the last month or two of a period when heavy grants can force down prices just before increases are computed. This practice has let the government in for a good deal of criticism, most of which holds that this is merely a fictional manipulation of the real price index.