Government Moves to Implement Emergency Economic Measures
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Government Moves to Implement Emergency Economic Measures

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The government has apparently agreed to reduce jobs in the public sector rather than cut wages in order to implement emergency economic measures that have been blocked by Histadrut. It remains to be seen whether labor will concur.

The Cabinet, at a special session today ordered the dismissal of six percent of the civil service workforce — double the dismissals originally proposed — but backed off from a planned three percent wage cut that had run into bitter resistance from Histadrut, the trade union federation.

For the moment, Histadrut leaders are not threatening work stoppages or disruptions. But it is not certain they will passively go along with the sharper reduction of manpower. Histadrut Secretary General Yisrael Kessar and his aides have made it clear that they will not agree to arbitrary dismissals but will insist on negotiated reductions in the workforce in the interests of efficiency and streamlining various public projects.

They will also press for substantially higher severance payments to public employes than called for by existing labor contracts. The government has indicated it is prepared to pay 150 percent of the usual severance pay which is based on one month’s wages for each year of employment.


Another immediate consequence of today’s Cabinet meeting was that all wage-earners, including those in the public sector, will receive a 14 percent rise in their cost-of-living allowances next month. Originally, the government announced that public employes would get only an ll percent increase.

The c.o.l. allowance is partial compensation for the sharp price hikes which followed the slashing of price support subsidies by the government at the beginning of July. Although it falls far short of full compensation for inflation, it is a result of Histadrut’s agreement to cuts in real wages to aid the economic recovery plan.

Substantial cutbacks of jobs in the public sector is also a crucial element. The Cabinet today ordered the various ministries to submit to the Treasury by Friday their plans to dismiss three percent of civil service employes, and by Sunday morning, lists of an additional three percent to be fired.

Deputy Premier and Housing Minister David Levy, the most outspoken Cabinet critic of the emergency economic program, chided his colleagues today for “folding up–as I predicted — in face of union resistance.”

He noted that not a single minister voted today in favor of going a head with the government’s original plan to implement steep cuts in both jobs and wages by administrative decree, as decided when a Cabinet majority approved Modai’s economic program on July l.

Modai refused to concede a government retreat. He said if the larger scale dismissals now planned are implemented, the economic goals will be achieved as well as, if not better than under the original program.

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