Histadrut Urged to Restrain Wages in Order to Combat Inflation
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Histadrut Urged to Restrain Wages in Order to Combat Inflation

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Finance Minister Yehoshua Rabinowitz urged Histadrut last night to adopt a policy of restraint in wage demands in order to help the government carry out its new economic plan aimed at fighting inflation.

Rabinowitz and Minister of Trade and Industry Haim Barlev addressed a meeting of the Labor Party Bureau on economic problems. Both stressed the need to reduce cost-of-living allowances which, now running at 30 percent, constitute a major factor in the inflationary trend. Histadrut spokesmen, on the other hand, demanded reductions in taxes levied on overtime and other extra work if the government expected the productivity increases it is urging.

Rabinowitz said the government’s new economic program was intended to slow down inflation by reducing public expenditures and curtailing private purchasing power. What Israel needs he said, is to close the wage gap by improving the income of the low wage groups, not by preserving “relativity” between wages.

He warned against frightening off local and foreign investors by excessive wage demands, noting that without economic growth through investments there could be no full employment and production would lag. Rabinowitz gave assurances that there would be no repetition of the 1966 economic recession. He said the first battle against inflation had been won when the government adopted its new economic program.

Barlev stressed increased productivity and better labor morale. He said the goal of the new policy was to reduce inflation from its present 30 percent per annum rate to less than 20 percent. He urged Histadrut to take the lead in promoting labor morale, observing that only 27 percent of Israel’s large industries and 51 percent of its small industries and workshops are privately owned.


The two Cabinet ministers spoke against a background of deteriorating labor relations in both service and manufacturing industries. While a seven-week “partial strike” of television and radio technicians, is expected to end shortly as a result of arbitration, telephone, telegraph and telex officials in Tel Aviv have declared a job action which could lead to disruption of normal communications. They are demanding extra pay for a “third language other than Hebrew and English,” and refuse to handle cables in other languages unless they receive extra compensation.

At the Timna copper mines in the Negev, workers at an underground garage voted to strike for extra pay for a second shift. Demands for additional pay are being heard in other fields. Ground officials at Ben Gurion Airport are demanding special aviation allowances, and workers at the Meteorological Institute want to be paid extra for having their weather reports relayed to pilots.

Meanwhile, Histadrut finds itself in an increasingly awkward position. If it refuses to support workers’ demands it weakens its position with the rank and file and leaves the door open for leftist factions to gain ground. If it supports the wage demands, it weakens the economy and the government.

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