Israeli unemployment exceeds one million: 24.4% of workforce

The number of unemployment benefit claimants exceeded one million for the first time on Wednesday, climbing to 24.4% of Israel's entire workforce. While the unemployment rate stood at just 4% prior to the coronavirus outbreak, over 844,000 individuals applied for unemployment benefits since the start of March. The vast majority - nearly 90% - are employees placed on unpaid leave. A further 6.4% have been made redundant. 'Unfortunately, our forecasts materialized - we reached one million jobseekers in March alone,' said Israeli Employment Service director-general Rami Garor. 'We are working to create the conditions so that next month can begin with lower unemployment, with the gradual return of the economy to normal, as far as possible and following the guidelines.' A significant increase in new applicants was identified on Tuesday compared to recent days, with nearly 35,700 applications submitted by jobseekers. About 24,000 new applications were received by the Employment Service on Sunday and Monday. 'The big question, both in Israel and in most economies affected by the virus, is whether this extremely exceptional situation is just temporary or could be long-lasting,' Prof. Eran Yashiv, an economics professor at Tel Aviv University's Eitan Berglas School of Economics, told The Jerusalem Post. 'There is a real danger that a significant fraction will not be able to resume work when this stoppage ends. Obviously, the longer the containment policies last, the worse the situation will become.' According to data published earlier this week, the hardest-hit groups of employees include unskilled workers (15.5% of new applicants), education workers (13.9%), sales employees (9.4%) and hospitality staff (6.4%). While the share of male and female applications was almost equal prior to the crisis, 57.7% of new applicants are women. Almost half (45.6%) of new applicants are aged 20-34, a further 37.3% are 35-54, and 14.6% are 55 and over. Only 2.5% of applicants are under 20 years old, likely due to mandatory service. 'In all crises, the most vulnerable workers are likely to be hit the hardest. Age will play a big role, because it always plays a big role,' said Yashiv, adding that low-skilled workers are also likely to be hit hardest. While recessions can be seen through the lens of possible 'creative destruction,' he added, this crisis is more likely to be a case of 'destructive destruction.' 'What economies are now considering, both in Israel and elsewhere, is how to get people back to work soon,' Yashiv said. Possible solutions include testing young workers for coronavirus, and returning them to the workplace. Estimates published by the National Insurance Institute (Bituach Leumi) on Tuesday showed that the number of unemployed workers will likely reach 1.1 million during April and May. The institute said it expects to pay an additional NIS 6.5 billion in unemployment benefits in June. Additional forecasts include a deterioration in the financial stability of the institute during May and June, culminating in a deficit of some NIS 8.1b. In an 'optimistic scenario,' in which unemployment benefits decrease significantly by September, the deficit is likely to fall to approximately NIS 319m. In a 'pessimistic scenario,' however, the deficit will only decrease to NIS 1.9b. by December. Seeking to tackle rapidly rising unemployment, the Employment Service published an 'emergency program' on Sunday to assist those out of work. According to estimates shared by the service, one in five workers on unpaid leave will not return to their place of work should the crisis continue past mid-April.

Israeli unemployment exceeds one million: 24.4% of workforce

"Unfortunately, our forecasts materialized - we reached one million jobseekers in March alone."

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Israeli unemployment exceeds one million: 24.4% of workforce

"Unfortunately, our forecasts materialized - we reached one million jobseekers in March alone."

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