COVID-19 slowed down Israel's business sector - study

National Insurance Institute report highlights ways the pandemic made business bad in Israel.

Shops begin to open in Jerusalem's Mahane Yehuda Market. (photo credit: MARC ISRAEL SELLEM)
Shops begin to open in Jerusalem's Mahane Yehuda Market.
(photo credit: MARC ISRAEL SELLEM)

In a turn surprising few, the COVID-19 pandemic has made a significant impact on wages and employment in the business sector, according to a recent study conducted by the Research and Planning Administration of the National Insurance Institute, along with the Wages and Labor Agreements Division of the Finance Ministry in collaboration with the Research Division of the Bank of Israel.

Among the results of the study is the finding that the pandemic has slowed the rate of the average paycheck increase. While the average wage per employee did increase by about 1.6% in 2020, previous years saw an increase nearly three times higher, at 4.5%. The average wage was most heavily influenced by workers who hold jobs that require physical presence on-site, who were impeded by social-distancing regulations. Those workers saw a 3.7% decline in their average income compared to pre-pandemic workers.

Likewise, social-distancing measures taken to prevent the spread of infection led to an unprecedented decline in the employment rate, particularly during the past two-plus years’ three major closures. While pre-pandemic years saw 5% and 6% increases in employment, the pandemic slowed that increase by nearly half, to 2.6% in 2020.

Earlier this week, the government mandate requiring all citizens to wear masks within enclosed public spaces was lifted. This is expected to negate at least some of the damage done to businesses by the pandemic. Employment in underperforming “in-person” sectors could see a rise to pre-pandemic levels due to the past years’ constraints being eased.

Business establishments such as malls and cinemas could stand to benefit from the mandate’s being lifted as well, as it instills confidence in some consumers that the pandemic might be coming to a close. Potential customers who have been more hesitant to visit public shopping areas or enclosed theaters might feel more inclined to go out, though it’s still too soon to tell.

CINEMA CITY in Jerusalem. Will it once again be filled with movie-goers? (credit: WIKIPEDIA)CINEMA CITY in Jerusalem. Will it once again be filled with movie-goers? (credit: WIKIPEDIA)

“It’s hard to say,” said the manager of a movie theater in northern Israel. “It’s only the first days now. It could make an impact, but as of right now, there hasn’t been enough time passed to really understand the trends. After a week or so, once people have returned to their [pre-pandemic] routines, we might have more to say, but right now it’s too soon to tell.”

But whether or not people remember what a pre-pandemic routine is remains to be seen.