Angry trade unionists demanded last night that the government pay a larger cost of living allowance than the four percent it announced yesterday to meet skyrocketing food prices. The Histadrut Central Committee, meeting in special session after the government announced it was slashing by half its price support subsidies for basic food commodities and transportation, said the four percent COL hike was inadequate compensation for price increases unprecedented in Israel’s economic life.
Spokesmen for workers’ committees all over the country expressed bitter indignation that the subsidy cuts were made without consulting Histadrut on the extent of compensation for wage-earners. They also demanded that the government continue to subsidize public transportation to avoid further hardships for the working population:
The Histadrut Central Committee had some harsh words for Finance Minister Pinhas Sapir’s statement to the Knesset yesterday that there would be no further taxes this year except the controversial added value tax (See separate story). The trade unionists claimed that this tax would hit the poorer sections of the population hardest. The Labor faction in the Knesset decided today to establish a special committee to review present plans to compensate the poor for increasing prices.
According to figures published by the Central Bureau of Statistics in Jerusalem today, the immediate consequence of the food price hikes was to raise the cost of living by 4.2 percent. The government said it would pay its employes an additional four percent COL allowance above the 14.5 percent paid earlier this month. It urged private employers to do the same.
But the food price rises–some as high as 80 percent–that shocked housewives at supermarkets yesterday are only the beginning, according to most economic experts. Additional increases are expected within the next few days for food stuffs made from the basic commodities, The COL index is expected to go up 6-7 percent next month which would nullify the four percent additional COL allowance.
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