Cost of Living Drops 0.2 Percent; Welfare Payments to Be Increased by 15 Percent

The cost of living index dropped 0.2 percent in January due mainly to a drop in the prices of clothing and footwear, the Central Bureau of Statistics reported today. The drop occurred before the introduction of new sales taxes and tariffs a week ago. Seasonal sales in apparel shops brought the price of clothing down by five percent last month. The price of shoes declined by four percent and there was a decrease in the price of vegetables. The Ministry of Public Welfare announced that payments to needy families will be increased by 15 percent bringing the average monthly relief payments to slightly over $15. The amount is still below the poverty line which Bank of Israel researchers place at $20 per month. The Ministry reported that 9000 families are currently on welfare. Their payments cease when family income exceeds the welfare payments.

The Ministry of Commerce plans to order Israel’s textile industry to curtail the production of semi-finished goods such as thread and cloth and concentrate on finished clothing and knitwear for export. A bulky report produced by a study commission under the auspices of the Productivity Institute concluded that Israeli labor is not cheap enough to allow it to compete on the international market in intermediate textile products. The report said that if the industry switches over to finished goods it could become profitable within five years. At present many textile factories are run at a loss and receive subsidies from the Government.

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