This week on Café Oleh we sit down with Niv Elis, resident blogger and Breaking News Editor at The Jerusalem Post, to discuss the relationship between the Israeli economy and employment opportunities. A graduate of Wesleyan University and the Johns Hopkins School of Advanced International Studies (SAIS), Niv''s expertise lies in policy, economics, conflict and Middle East affairs. He has published articles with Forbes, The Washington Post, The Christian Science Monitor, Moment Magazine and the Institute for Counter-terrorism.
Read on to hear Niv''s insights on the status of the Israeli economy and your chances of finding a job, opening a business, and lining your pockets with shkelim after your aliya.
The Israel economy is quite strong, especially compared to the economies of other developed countries. How does this translate into employment opportunities?
Israel was really well prepared for the financial crisis in 2008, so even though the global downfall took its toll on us, we’ve been way ahead of the competition in terms of recovering. Unlike unemployment in the US and Europe, hovering above 8 and 10 percent respectively, the unemployment rate here is below 7 percent (it seemed lower last year, but an embarrassing glitch the calculation methodology kept the number artificially low). Even with the new calculation methods in place, however, the numbers gloss over some interesting problems with Israel’s labor market.
What industries have the most room to "absorb" job seekers? Which industries are growing?
Israel’s economy has about twice as many openings for skilled as unskilled workers, and a strong workforce in sales and service, manufacturing, trade, business and education. If you are a high-tech whiz, an academic, or a master at business (strategy, marketing and the like), you should have no problem.
What does the current strength of the economy mean for new olim? What opportunities does it afford them? Is the government “pro-business?” Is it within the realm of possibility to do something like open a business?
Israel ranks 34th (of 183) in the World Bank’s “Doing Business” index, which measures how “pro-business” the government is, or how easy it is to open up a business. Among high-income countries, it’s right below the middle, at 28th place of 48. While there are only five procedures you have to go through to start a business, in line with the OECD average, it takes almost three times as long to actually get your business registered and started, and a lot longer to register property and hook up electricity. Total taxes are lower, but take longer to file and pay. However, all these evaluations are in comparison to the OECD average – it might seem much more cumbersome for an Oleh from the US, which is ranked 4th in terms of ease of doing business.
The Israeli government has something of a different relationship to the economy than olim might be used to. What should olim know about this relationship and how does this affect the economy and employment opportunities?
Unemployment benefits are quite good in Israel, which is helpful when you’re looking for a job (Forbes rated it the 9th best place to be unemployed in the world in 2008). Most unemployed people (63%) find work in less than 6 months. On the other hand, if you work in Israel, you’re far more likely to be affected by a labor strike than just about anywhere in the world, which can mean unpaid work days and lost business.
Is the Israeli economy liable to fail or recess the way other developed economies recently have? What factors preclude such a decline and what factors predict it?
Sure, it''s possible, but the economic outlook for 2012 shows that while Israel will keep growing at a healthy rate, it’s also slowing down from the last two years. Israel’s biggest economic problem in the short-run is dealing with fallout from Europe, which is one of our major trading partners. In the long-run, the major problem will be linked to integrating the haredi and Arab populations into the workforce.
What effect does the current political situation (especially insofar as the Arab-Israeli conflict in concerned) have on the economy? How has the Palestinian situation previously affected the economy and thus employment?
The recent unity government should be good news for the economy because it provides stability, and also because its top priorities (reforming the Tal Law, which will integrate the workforce, passing a new budget, reforming the electoral system to increase stability and progressing peace talks with the Palestinians) will all benefit the economy. It’s true that security makes business a little riskier here–Moody’s credit ratings agency just downgraded the banking outlook in part because of regional tensions–but it also adds to the economy in other ways. Israel has a ton of security and defense-related jobs, from consulting to technology. The economy has proved pretty resilient to war. Though there is certainly a threat that an attack of some kind could destroy important infrastructure (say, an electricity plant), the security situation is ever-present in the defense budget, which has proved very difficult to pare back alongside other budget cuts.