Unemployment holds at five-year lows

Jobless rate dips to 8.7% as downward trend expected to continue.

By DANIEL KENNEMER
March 19, 2006 21:09
1 minute read.
poverty garbage 298 88

poverty garbage 224.88. (photo credit: Ariel Jerozolimski)

Some 8.7 percent of Israel's civilian labor force was unemployed in January and December, down from 8.8% in November and October, according to the most recent trend data released by the Central Bureau of Statistics. The data "absolutely" indicate that unemployment is continuing to fall, said Rafi Melnick, Dean of the Lauder School of Government at the Interdisciplinary Center in Herzliya and formerly of the Bank of Israel. "Based on the trends of 2005, unemployment will presumably fall in 2006 as well. It is almost a certainty," he added, citing continued economic growth and demographic developments, including reduced immigration. Unemployment in January was at its lowest level in five years, according to the CBS data released Sunday. The updated figures indicate that 8.9% of the work force was unemployed in September and August, and 9% were without jobs during the previous four months. Some 9.3% of the work force was unemployed in January 2005. Unemployment has been dropping steadily since reaching a peak of 10.9% at the end of 2003. Two forces helping boost employment last year were increased rates of participation in the work force and limitations on the number of foreign workers arriving in the country, Melnick indicated. Nonetheless, he said, the government was not enforcing its policy of reducing the number of foreign workers strongly enough. "In reality, in 2005 the number did not lessen according to the statistics. There is a declared policy, but the execution thereof is not strong enough." If the government were to continue with the policy of cutting the number of foreign workers, Israelis would take their places, "unemployment would fall further, wages would rise, poverty would lessen, and wages of unskilled workers would rise," he argued. When fourth quarter jobs data were released February 28, Israel Institute for Economic Social Research chairman Roby Nathanson predicted that unemployment would not drop below the 8.5%-9% range in 2006 given expectations for slower economic growth. To boost employment and participation in the work force, Nathanson called on the government to expand the "Mehalev" welfare-to-work program, also known as the Wisconsin program, and apply it nationwide. He also recommended encouraging female employment by subsidizing daycare and recognizing family costs as tax deductions.


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