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Eshkol’s Austerity Program Endorsed by Labor; Curbs Wage Demands

September 22, 1966
See Original Daily Bulletin From This Date

The executive of the Histadrut, Israel’s labor federation, endorsed last night Premier Levi Eshkol’s three-year austerity program for Israel’s troubled economy which calls for curbing wage demands and a cut in cost-of-living allowances to wage-earners.

Premier Eshkol’s Mapai Party and Achdut Avodah — which together represent the dominant element both in the Cabinet and in the Histadrut — cast 58 votes for endorsement. The Gahal alignment of Herut and Liberals, former Premier David Ben-Gurion’s dissident Israel Workers Party (Rafi) and the Communists cast 28 votes against the restraint program. The leftist Mapam carried out its pledge to fight the program from within the Government by abstaining in the executive vote. The Mapam faction in the Histadrut executive has 18 members.

The agreement pledged the Histadrut to accept half of the regular cost-of-living payments for the next two years, to restrict pay rises of white collar workers in affiliated unions, and to accept radical revisions of work norms and incentive pay systems.

The executive acted after hearing warnings from Premier Eshkol, Labor Minister Yigal Allon and Trade and Industry Minister Haim Zadok that unemployment, already a serious problem, would continue to grow if there were no curbs on wage increases. They also said that the only realistic solution to the unemployment problem was diversion of surplus manpower to export industries but that those industries could not expand and provide more jobs unless they were competitive and profitable.


Meanwhile, surgery nurses postponed a strike scheduled to begin today after a marathon ten-hour conference on their demands for more pay. Mr. Allon, Health Minister Israel Barzilai and Histadrut leaders took part in the talks. The Histadrut agreed to seek arbitration of the nurses’ demands.

The Treasury announced today that the subsidies given farmers for poultry, eggs and milk are to be discontinued shortly. Those subsidies have amounted to 30, 000, 000 Israeli pounds ($10, 000, 000) annually. It was also announced that electricity rates in Israel will be raised an average of 10 percent, beginning October 1. The cost of poultry, eggs and milk are also due for increases.

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