Mapam Calls for Cash Payments to Workers to Compensate for Purchase Power Decline

A rift appeared to be developing in the Labor Alignment today over Finance Minister Pinhas Sapir’s 1971 wage policies. The Mapam faction claims that Sapir’s program will deny workers the cost-of-living increases sufficient to meet the inflationary price spiral. The Alignment’s economic affairs committee meets on the subject this afternoon but no final decision is expected. Mapam Party’s secretary, Naftali Ben-Moshe, claimed this week that workers’ income has dropped while productivity has risen and charged that employers were profiting from price increase. He said Mapam is demanding cash payment for workers to compensate them for the drop in purchasing power in 1970, noting that the price index rose by 11 percent in 1970, more than half the rise coming after August.

Ben-Moshe said that tax and customs duty increases due to defense burdens were expected to raise prices by two percent but the actual rise was four-and-a-half percent which allowed wholesalers and retailers to make “a very good profit.” He said that Sapir’s wage program, which has been endorsed by Histadrut secretary-general Yitzhak Ben Aharon, excluded the influence of price rises since August in calculating the new cost-of-living payments. He said that if Sapir’s program is accepted, Israeli workers will have lost seven percent of their income value during 1970. Sapir himself inveighed against wage demands last week. He told his advisory forum in Jerusalem, “I shall use every platform at my disposal to warn and warn again before it is too late that bedlam in the wage field will harm the wage-earner himself and the entire economy.”