Wage-freeze law to be modified


BELGRADE, Yugoslavia -- Prime Minister Branko Mikulic said his government is planning moves to cushion the impact of a wage freeze that has sparked strikes by some 50,000 workers, but he emphasized, 'We shall not make concessions.'

The law, which took effect Feb. 26 and expires June 30, freezes salaries of office and factory workers at the level of the last quarter of 1986. It allows raises only if offset by comparable increase in productivity and profit.


As many as 30 percent of Yugoslavia's workers have been affected by the law.

The combination of the wage freeze and rising prices have prompted more than 170 countrywide strikes -- involving some 50,000 workers - since the pay-freeze law was implemented.

Mikulic said Tuesday his government is preparing to introduce a series of economic measures in the next 15 days that should slow down the price hikes and cushion the impact of the wage freeze on workers.

The measures could include banning bank loans to firms continually in the red, improving supplies, importing goods in short supply and exempting from the pay freeze some firms that made profits in the fourth quarter of last year.


But Mikulic vowed the measures would not be concessions.

'We shall not make concessions. We have to respect the principle that wages are brought in harmony with labor productivity,' Mikulic told the Chamber of Commerce.

Economists and business executives expect more strikes in early April, when many of the nation's 6.5 million workers will get smaller paychecks because they have to repay salary hikes given them in January and February before the freeze was implemented.

In what analysts consider a conciliatory move, the government last week imposed a partial three-month price freeze on non-essential goods such as textiles, china and furniture.

Yugoslavia, with 23 million people, had an inflation rate last year of 100 percent, the highest in Europe. Inflation rose 14.2 percent in January and February -- indicating an annual rate of 130 percent for 1987.

Mikulic, a 58-year-old economist who became prime minister last June, has promised to do all in his power to pull the country out of its economic crisis.

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