Cabinet, Histadrut, Mapam Thrashing out Consequences of Devaluation

A three-way clash involving Israel’s Cabinet, its Mapam members and the Histadrut, was reported developing today over labor demands for cost-of-living changes in wage agreements to offset the price rises stemming from Israel’s new economic policy. After sharp debate, the Knesset approved today at a first reading approval of the emergency regulations under which the Israeli pound was devalued and companion measures of some price increases, along with new controls on currency trading. Approval at the required second reading was expected later in the Knesset session tonight. Histadrut officials announced yesterday that the federation was supporting the government’s devaluation of the pound and its wage and price freeze and urged all workers to avoid actions likely to bring about changes in present wage agreements. But the federation coupled that appeal with a demand on the government that prices of essential commodities–which spurted yesterday by at least 10 percent–be rolled back to pre-devaluation levels. The Histadrut appealed formally to the Cabinet last night to rescind the price increases announced yesterday on many basic foodstuffs. Spokesmen for Mapam and the Histadrut denounced the devaluation and its impact on Israeli prices and wage standards. Mapam Deputy Dov Zakin cited the arguments given last week–before devaluation–by Finance Minister Pinhas Sapir in opposition to devaluation.

The Mapam Deputy said those arguments were still valid and asserted that the manner in which the government had handled devaluation and its related controls was “undermining confidence” in Israel’s currency and hitting out at the worker, “thus increasing the inequality between income groups in the country.” Itzhak Ben-Aharon, Histadrut secretary-general and a Labor Party MK, said that while the devaluation may have been needed, the price increases on four or five basic foodstuffs were not. Sapir, backed by most members of Premier Golda Meir’s Labor Party, had previously proposed that the anticipated general five percent rise in prices in Israel expected from devaluation should be lopped off the automatic cost-of-living increments provided in wage agreements between the major unions and employers. The Histadrut central committee, in which Labor party members are a majority, has rejected that proposal. Leaders of Mapam announced a demand that cost-of-living allowances be paid retroactive to July 1, although existing agreements provide for such payments next Jan. 1. The Mapam secretariat issued a statement yesterday declaring that it planned to make the question of earlier payments of cost-of-living allowances its main goal for workers. The leftist party hinted it would support strikes by workers in support of early payment of the allowances.