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Sapir Calls for a Wage “de-escalation”

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Finance Minister Pinhas Sapir has issued a stern warning to government employes and other on the public payrole to de-escalate their wage demands and end their strike threats unless they want to undermine the nation’s economy and touch off runaway inflation.

Sapir, who arrived in the United States Friday for a two week visit on behalf of the United Jewish Appeal and Israel Bonds, delivered his warning in a statement prior to departure. He addressed it to some 100,000 public employes in 12 categories who are involved in current labor disputes. He told them flatly that the government will make no further concessions beyond those announced and will not increase wages beyond the limit it has set of 42 percent.

He said that if the government were to meet the wage demands of those on strike or threatening to strike it would cost the State budget IL 300 million in addition to the IL 1 billion paid in the form of cost of living allowances and wage increases during 1972-73. He warned that printing additional bank notes and throwing millions of pounds into circulation would create a new round of inflation that would quickly nullify the wage increases.

Sapir asked the workers to hold their wage demands in abeyance until 1974 when negotiations for new biannual wage agreements start. He called attention to reduced income tax payments beginning July 1 which will give wage earners more take-home pay.

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