A battle is looming within Histadrut over Finance Minister Yigal Hurwitz’s sweeping economic austerity program. Likud members of the Histadrut Central Committee have pledged their support for the measures but Laborites have taken strong exception to some of them. Histadrut Secretary General Yeruham Meshel cut short a visit to Spain yesterday and returned to Israel to preside over a special meeting of the Central Committee today.
Hurwitz has already conceded to one demand by the labor federation. He said the government would consider raising the cost-of-living allowances periodically given wage earners, to 100 percent of the inflation rate. At present it is paid on only 70 percent of inflation though previously it was 80 percent of the cost-of-living increases. He also announced that the increments will be paid in January instead of next April when they are normally due.
But the strongest protests within Histadrut were over Hurwitz’s freeze of wage agreements. Under his program, labor contracts up for renewal next April, the beginning of the new fiscal year, will be extended until April, 1981. If this is implemented in the public sector the private sector will doubtlessly follow through. Hurwitz said the freeze is necessary to preserve the real value of wages.
The Minister told the Likud Histadrut members that tough times lay ahead, that some firms might go bankrupt and there might be unemployment. But the desperate condition of the economy demands major surgery, he said. The Likud members promised to dissociate themselves from any attempt by Labor to exploit the economic austerity in an attempt to topple the government.
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