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Israel Facing Labor Troubles

Israel is facing an avalanche of labor troubles a labor official warned last night. Eliezer Molk, secretary general of the Haifa Labor Council said dissatisfaction was growing among industrial workers as prices and taxes continue to rise. “It is no secret that an embittered worker cannot produce the same as a satisfied one,” Molk said. He noted that since the government has levied higher taxes on overtime and night shift pay more employes are refusing extra work.

Hillel Seidel, a coalition MK wrote to Premier Yitzhak Rabin last night urging him to convene a joint meeting of labor, management and the government to tackle the mounting economic problems. Seidel, a member of the Independent Liberal Party, proposed a total freeze of prices wages, taxes and private earnings for one year to prevent the economic situation from deteriorating further.

The most serious aspect of the problem is the continuing rise in the prices of almost all commodities and services. Price hikes occur so rapidly that shoppers in supermarkets often find three different prices stamped on goods. Further price rises are expected on locally produced commodities since the Minister of Commerce and Industry agreed to calculate the latest wage increases in the final price.

Taxes are becoming increasingly burdensome and the prospects are for more. The mayors of the three largest cities–Tel Aviv, Jerusalem and Haifa–have formed a “club” to try to solve the financial problems besetting all municipalities. Local deficits run into many millions of pounds and unless relief is forthcoming in the form of government subsidies the mayors say they will have to impose new municipal taxes or cut vital services.

Meanwhile, the business sector is objecting vigorously to a government plan to freeze bank loans as a measure against inflation. Because of the liquidity crisis, merchants and manufacturers have been taking loans at high interest rates in order to keep their operations going. The government wants to freeze loans for a three-month period. Mark Moshevich, president of the Manufacturers Association has warned the Finance Minister and the Governor of the Bank of Israel that Israeli industry would collapse if the credit feeze plan is approved.

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