Israeli housewives had a disagreeable surprise when they went to the supermarket this morning. Their money bought one-third less of such essential commodities as bread, butter, margarine, oil, eggs, sugar and milk than it did the day before. This was the result of yesterday’s Cabinet decision to cut by more than a half the government’s price support subsidies for essential products.
The blow was softened somewhat by the government’s announcement that it would pay its employes an additional four percent cost of living allowance–above the 14.5 percent paid earlier this month. It has urged private employers to do the same. Families with more than two children, pensioners and families on social welfare will receive increased grants to cushion the impact of soaring prices.
But the price hikes posted today were unparalleled in Israel’s economic life. Sugar was up more than 80 percent, from IL 1.14 to 11, 2 per kilo; eggs were up from 16 to 26 agorot; margarine from 32 to 50 ag.; milk from 64 to 100 per half liter; flour from IL 450 to IL 850 per ton; bread from 32 to 55 ag. per loaf, and challah from 40 to 60 ag. Hard cheese went from IL 7 to IL 11 per kilogram; edible oils from 75 to 105 ag. per bottle. In addition, public transportation is due for a 50 percent fare increase to go into effect within two weeks.
Economic analysts believe today’s price bikes are only the first round in a new chain reaction of price increases. The next items expected to go up are products made from the essential commodities. These include cakes, sweets, juices, jellies, ice cream and, of course, restaurant prices. A general increase of 10 percent in the cost of living is forecast before the end of the year, although Finance Minister Pinhas Sapir said he hoped the present prices on essential foodstuffs would hold “unless there is a world price earthquake.”
Yeruham Meshel, acting secretary general of Histadrut, called a meeting of the central committee tonight to discuss the new price situation. Histadrut wants employers to follow the government guidelines by Placing additional cost of living allowances. But the employers are balking. The Employers Coordination Bureau called on the government last night to reconsider its decision to pay additional COL allowances on grounds that it would only strengthen inflationary trends.
POLICE ARREST 5 IN PRICE HIKE DEMONSTRATION
This afternoon police cordoned off the Central Bus Terminal and arrested five persons in dispersing a demonstration against the food price hikes. The demonstration was conducted by several score Black Panthers who were joined by an undetermined number of local housewives. The demonstrators trooped through the bus station carrying signs that read, “They eat cake and let us eat dry bread,” and “War on poverty, not on the poor.” Traffic to and from the terminal was halted until the police restored order.
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