Histadrut Cancels General Strike

A general strike called for tomorrow was cancelled by Histadrut today at the urging of the national Labor Court here. The court did not act on an appeal by the Manufacturers Association to declare the strike illegal but arranged a compromise in the interests of “good labor relations.” Histadrut stressed that the strike was not aimed against management but was intended as a protest against the government’s new austerity economic program.

The court agreed that Histadrut could reactivate the strike plans. It promised to review the issue later this week or next week. Yesterday, the Histadrut leadership had appeared determined to go ahead with the strike after a Tel Aviv district Labor Court rejected an appeal to ban it.

The strike decision was taken by Histadrut’s Executive Committee at a stormy session during which fist-fights broke out between members of the Labor Party and other opposition factions and representatives of Likud who support the government’s economic policies. Police were called at one point. A Likud-sponsored no-confidence motion in Histadrut Secretary General Yeruham Meshel was defeated.

Had the general strike materialized, it might not have been fully effective. Several public service workers unions said they would not participate. Many civil servants were not willing to lose a day’s pay.

EFFECTS OF ECONOMIC MEASURES

Meanwhile, the initial effects of the government’s economic measures remained unclear According to one report, the labor market is responding to Finance Minister Yigal Hurwitz’s efforts to shift employment from services to productive industry. But soaring prices resulting from the elimination of government subsidies for basic commodities is making it harder to sell goods.

Winter sales will begin tomorrow instead of in several weeks in an effort to move merchandise. The shoe industry says it is left with a large stock of unsold goods. The head of the Contractors Association warned of a paralysis of residential building because of the government’s freeze on credit.

WARNS OF LARGE-SCALE UNEMPLOYMENT

These developments seem to bear out the warning by Avraham Shavit, president of the Manufacturers Association, that large-scale unemployment is imminent. Addressing a press conference, Shavit charged that Hurwitz’s new measures will create unemployment for industrial workers at a time when the government is encouraging workers to switch to industrial jobs.

“Last week I supplied Hurwitz with a detailed list of plants which could absorb immediately some 1600 workers,” Shavit said. “Now I have to tell him that the list is no longer valid.” He said many plants face bankruptcy because of the tightening of credit. The only financial assistance they can receive is either loans in Israel Pounds at an interest rate of 120 percent or dollar loans at 12 percent, he said.

According to a just published study by a firm of financial consultants affiliated with the Bank Leumi, inflation may increase by 40 percent over the next three months as a result of the government’s austerity measures. The study found that consumer prices will rise 20 percent higher than originally expected. Although subsidy cuts will save the Treasury IL 8.5 billion, the government’s debts exceed that figure by IL 2 billion. Manufacturers say, meanwhile, that the credit freeze alone will force them to raise prices by at least 10 percent.