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Industrialists said Monday that unemployment will drop to 8.7 percent by the end of the year, down from 9% at the end of 2005.
Alongside the drop in unemployment, participation in the labor force will rise to 55.6% from 55.2% at the end of last year, Manufacturers Association of Israel chief economist Nira Shamir said, but stressed that the proportion of workers among the Israeli population was still low in relation to member states of the Organization for Economic Cooperation and Development.
In the OECD, the average unemployment level is expected to be 6.2% by year's end, while participation in the labor market is expected to average 70.3%. According to the OECD method of calculation, Israel's work force participation rate would come to 62.2%, narrowing the gap somewhat, Shamir noted.
The bulk of the disparity in work force participation rates between Israel and the OECD is a result of relatively low participation among Israeli men - due to the influence of compulsory military service and haredi study norms - and among Israeli Arab women, she said.
Fully 71% of Israeli women aged 25 to 54, however, were expected to participate in the labor force at the end of the year, slightly higher than the 69.5% of women in the same age group in the average OECD country.
On the same day that Shamir issued her forecasts, association president Shraga Brosh called on the government to allocate more funds toward reducing unemployment, and association director-general Yehuda Segev cautioned the government against cutting allocations for foreign workers. Both did so in advance of discussions today on Finance Minister Avraham Hirchson's 2007 budget proposal.
If the government goes through with the cut, more than 100 factories - employing 40,000 workers - will be "eliminated," Segev said.
He demanded that the government continue granting permits allowing industry to employ some 1,500 foreign workers who cannot currently be replaced by Israelis, who lack training in specific fields in the hi-tech industry, metalwork, textiles, printing and other areas of expertise.
These workers make it possible for "thousands of Israeli workers" to be employed, Segev stressed.
Among reforms included in the 2007 budget proposal, the Finance Ministry included reducing the number of foreign workers as part of efforts to open up jobs for unemployed Israelis and increase participation in the work force.
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