Government Backs Down on Wage Limits

The government backed down yesterday on the 15 percent limit it put on wage increases for civil servants. But the agreement, reached between Finance Minister Simcha Ehrlich and Histadrut Secretary General Yeruham Meshel, satisfied only some segments of the publicly employed work force. Tens of thousands of other government employes continued to threaten job actions and strikes for higher wages.

The 15 percent ceiling on wage hikes, confirmed by the Cabinet Sunday, remains in force. But under the Ehrlich-Meshel formula, further increases will be allowed up to seven percent. The compromise represents a major retreat by the government but offers far less than many key employe groups are demanding.

The immediate effect was to send the striking communications workers back to their jobs ending the television and radio blackout that has been in effect since Monday and restoring service on thousands of telex and telephone lines that needed repairs. But teachers are still planning a general strike in 10 days to support demands for a 35 percent wage increase.

Government-employed physicians are also insisting on more than 20 percent increases. About 40,000 other civil servants plan a warning strike at the beginning of next week and strikes or work stoppages are threatened by academicians, technicians and nurses.

The agreement between Ehrlich and Meshel may ease the labor situation somewhat. But according to Bank of Israel Governor Arnon Gafni, it will serve only to accelerate inflation. Economists here explained, however, that the agreement does not exceed the government’s budget.

They quoted senior sources at the Treasury to the effect that the possibility of wage increases up to 20 percent was built into the annual budget in anticipation of resistance to the 15 percent limit which has been government policy. Ehrlich was willing to pay the price, the sources said, in order to gain Histadrut support. Histadrut was willing to settle because it feared it might lose control of the increasingly restive labor force. It now faces the difficult task of convincing all unions to accept the agreement.

NEXT STORY