Yishai calls on gov't to subsidize employment in western Negev

Labor Minister wants stimulus benefits for employers conditioned on hiring in priority areas.

Yishai brilliant  298 (photo credit: Ariel Jerozolimski )
Yishai brilliant 298
(photo credit: Ariel Jerozolimski )
Industry, Trade and Labor Minister Eli Yishai is calling on the government to give Sderot and western Negev communities priority in employment stimulus programs currently being put together in the wake of the global crisis. "We have to give special priority and subsidize the cost of employment for workers, in particular in Sderot and the western Negev, as part of the national employment support plan," Yishai said. "The difficulties faced by businesses in Sderot and the western Negev point to hardships in their ability to hire workers and to offer salaries that are able to encourage employees to work in these areas despite the special security situation there." Yishai's plea came ahead of the social-economic cabinet meeting scheduled for Monday next week which will discuss the details of a plan aimed at coping with the continued wave of layoffs in the wake of the global crisis. As part of the plan, NIS 150 million has been budgeted to encourage employers to hire new workers in the business sector. The plan contains two main employment support tracks. The first is aimed at encouraging the hiring of new workers in outlying areas and among minority groups (such as haredim), and the second is intended at supporting the hiring of additional workers for research and development centers of large companies, particularly in outlying areas. If Yishai's proposal is approved, the minimum condition for receiving government support would entail the hiring of one worker in the priority areas, compared with 5 workers in other areas. In addition, employers in these areas will enjoy a higher subsidy of employment costs of hiring new workers than in other areas. For example, an employer in the priority areas who pays a salary of NIS 6,000 will be eligible for an additional NIS 300. On Tuesday, Finance Minister Ronnie Bar-On, Welfare Minister Isaac Herzog and Yishai reached an agreement on a series of steps aimed at supporting the employment market. Joint teams of the three ministries were instructed to finalize details of the plan by next week so that it can be presented to the cabinet. Over recent months, the aims of the plan were formulated by the government's social-economic agenda forum, which includes representatives of the Finance Ministry, the Bank of Israel, the Israel National Economic Council, the National Insurance Institute, and the Employment Service. The principles of the plan have been discussed with the Histadrut Labor Federation. The measures of the plan include the subsidy of salaries for laid-off workers who take low-paying jobs; more flexible criteria for unemployment payments; and subsidizing expenses for traveling to places of work far from home. Over recent months the business sector has started to implement efficiency measures and lay off workers in the wake of a deepening economic slowdown caused by the global financial crisis. Technology and IT companies have laid off more than 2,000 workers in the months of November and December and the trend is not about to change any time soon, according to research company IDC Israel. Looking ahead to 2009, IDC expects between 9,000 to 13,000 jobs to be lost in the high-tech sector and corporate computer divisions. Local high-tech companies involved in development, which employ about 100,000 workers, are estimated to cut 7 percent to 10% of their workforce. IDC predicts that IT companies, which employ about 28,000 people, will cut their workforce by about 4% to 7%. In addition, IDC estimates that revenues in the Israeli information technology industry will decline by about NIS 1 billion over the next few years. Growth is expected to be near zero, and even slightly negative in 2009.