Possible Large Scale Unemployment in Israel Causes Political Furor

The prospect of large scale unemployment owing to additional budget cuts proposed by the Treasury has stirred a political furor and the wrath of Histadrut leaders who promptly denounced the plan and declared it would not work.

Sources at Premier Shimon Peres’ office were quick to note today that the plan has not yet been discussed with him and was at the moment, nothing more than a proposal by the Treasury. Peres is aware of the need for further paring of the budget but has not been given the details, the sources said. Finance Minister Yitzhak Modai said earlier this week that the budget must be slashed by an additional half billion dollars and that he would present his plan to the Cabinet at its next regular meeting this Sunday.

The Treasury’s proposals are said to include the immediate dismissal of 4,000 teachers, 4,000 defense-related government employes, 1,500 employes of local authorities and several thousands from the social and health services. The government also will be asked to freeze the construction of new schools and possibly to close some existing schools which would force many teachers to resign. Public works would be sharply curtailed.

One of the immediate reactions was a series of non-confidence motions presented in the Knesset today by opposition parties of the left and right. (See following story.)

LABOR UNREST PREDICTED

Government economists said today that there was no choice but a massive cutback on manpower as an initial step toward dealing with Israel’s economic crisis. But Histadrut Secretary General Yisrael Kessar told a workers rally in Haifa today that mass unemployment would lead to nation-wide labor unrest.

“How can the government decide to fire 15,000 civil servants without first deciding how to absorb the present unemployed?” the visibly angered Kessar asked. He proposed new training schools and the creation of new jobs before anyone is fired. He warned that if the government does not undertake compensatory measures, there may be as many as 100,000 jobless in Israel by the end of this year.

Dr. Avraham Friedman, a Hebrew University labor relations expert, told Voice of Israel Radio today that he did not think there would be any mass firings unless all of the Cabinet ministers were in agreement. Unless there is real unity in the Cabinet there will be “tough battles” between ministers and between the government and Histadrut on every front, he said. He added that the outcome would be a measure of the strength and influence of Finance Minister Modai.

Yaacov Tzur, the Minister of Immigration and Absorption, denounced the Treasury for what he called its “daily leaks, announcements and threats of massive dismissals of workers.” It is a critical issue and is not to be toyed with, he said, indicating concern that daily reports of economic hardships ahead could have an adverse impact on aliya.

CRACKDOWN ON VIOLATORS

The authorities meanwhile are cracking down hard on violators of the three month price freeze that, along with a freeze on wages, went into effect on November 2. A Tel Aviv magistrates court imposed fines of up to 50,000 Shekels today on some 100 merchants charged with violations of the price freeze. Inasmuch as most of them pleaded guilty, all of the cases were disposed of within two hours.

But one judge charged that those brought court were only the “small fry” and that action against more serious price violators was insufficient. Most of the defendants were accused either of charging excessive prices or asking for payment in Dollars which is banned under the freeze package. All prices must be quoted in Shekels which are pegged at the oficial rate of 526.97-$1.

MKS MAKE SACRIFICES TOO

With the general population being asked to bear the burdens of economic hardship, the government announced today that its members too were making sacrifices. Cabinet ministers no longer will be driven in expensive Volvos. They will have to settle for the Peugot 505. The French-made Peugot costs about $5,000 less than the luxurious Volvos made in Sweden.

At the same time, Knesset members who live outside of Jerusalem but must spend nights there to attend morning sessions, will be asked to put up at three star rather than five star hotels. But they may have the best of both worlds. The posh Jerusalem Hilton which rates five stars is offering MKs rates equal to those charged by cheaper hostelries.