MKs lash out against misreported unemployment data

Misleading headline reporting non-adjusted data draws criticism.

Labor MK Itzik Shmuli 370 (photo credit: Knesset)
Labor MK Itzik Shmuli 370
(photo credit: Knesset)
Declarations such as “In the month of October 2013, there was stability in the unemployment data” generally do not draw loud critiques of economic policy, but a media snafu managed to turn Wednesday’s monthly report from the Israeli Employment Service into a political issue.
The service bases its monthly data on the numbers of people who come in seeking assistance in finding employment or unemployment benefits. It said that in October there was “no significant change in comparison to the previous month in the number of job seekers at the employment service, the number of unemployed and those among them who were dismissed.”
The seasonally adjusted number of unemployed people was down by 0.2% from the previous month, and the number of dismissed workers stood at 12,900.
A Ynet article on the report’s figures, however, reported that 14,420 people had lost their jobs, representing a 28% increase from September and the greatest rise in unemployment since July, drawing political outrage over the apparent economic deterioration.
The reason for the disparity is that Ynet reported raw data that was not seasonally adjusted, imbuing the figures with misleading implications.
Over the course of each year, there is a predictable ebb and flow to employment levels based on anything from the weather to holidays. More workers are needed during the September holidays, for example, but the extra workers are let go once the holidays end.
To make the data easier to compare from month to month and ensure that there aren’t wild political reactions to the typical employment patterns that mark seasonal shifts each year, the data is “adjusted” to offset the expected seasonal fluctuations.
“Ynet took our raw data, where there is a jump between September and October because of the post-holiday season,” a spokesman for the Israeli Employment Service explained. “Seasonally there was no difference between September and October.”
That didn’t stop politicians from sounding off.
Labor MK Itzik Shmuli slammed Finance Minister Yair Lapid for “zigzagging” policy that he said harmed the working man. Lapid recently changed course on his own plans to raise income taxes, canceling the tax increase in light of improving short-term fiscal conditions.
“Because of his failed policies as finance minister, working peoples’ situations are worse: more and more people are laid off and those who still have jobs are paid a pittance, which does not get them through the month,” Shmuli said.
Meretz MK Ilan Gilon chimed in: “Government intervention in this wave of unemployment is now necessary, and it is appropriate for Minister Lapid to establish a fund to support failing factories that provide employment to tens of thousands of Israelis.”
Layoffs have been in the headlines in recent weeks, as companies such as Teva Pharmaceuticals, Israel Chemicals and Office Depot announced plans to shed workers.
Despite warnings from the Bank of Israel that unemployment will likely rise next year, the most recent unemployment rate from the Central Bureau of Statistics, which uses regular labor surveys as the basis of its data, nudged down to 5.9%, the lowest in over 20 years and among the lowest in the West.
Despite its bleak presentation of the economic situation, the Ynet article acknowledged: “The Israeli economy created over 27,000 jobs in October, far more than the number of unemployed.”