Unemployment in Israel falls to 5% in April

The unemployment rate in Israel fell to 5% in April, the Central Bureau of Statistics announced today.

This Wednesday, state unemployment benefit will be cut by 10% following the fall in the unemployment rate to below 10% in March. The cut will start to apply from the benefit payment to be paid on June 12.

Under the law, if the unemployment rate falls below 7.5%, then unemployment benefit payments end thirty days later. Accordingly, the unpaid leave scheme will end on June 20 as planned. The percentage of employees temporarily absent form wok each week for reasons connected to Covid-19 together with the unemployed percentage reached 7.9% in the second half of April. In total, there were some 450,000 people out of work in April (10.6% of the workforce), including employees laid off or who resigned, workers on unpaid leave, and people without work who for various reasons were not looking for work.

As against the board measure of unemployment, which stands at over 10%, the number of jobs vacant rose by 10% in April to 130,000, which compares with less than 100,000 before the coronavirus pandemic started. A similar phenomenon is observable in many developed countries – employers who can’t find workers.

How does the gap arise between the broad measure of unemployment and the difficulty in filling job vacancies? The private sector is not managing to man many jobs because of the law on leave without pay, which represents a negative incentive for workers on unpaid leave to return to work. A similar phenomenon in the US led to a rise in wages, and presumably something similar will happen in Israel, if in a more limited way, until the law is abolished or its scope is reduced. It could also be that there is a mismatch between the workers who became redundant during the coronavirus period and the jobs that are vacant, and perhaps workers’ order of priorities has changed.

Published by Globes, Israel business news – en.globes.co.il – on May 24, 2021

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Source Link: https://en.globes.co.il/en/article-unemployment-in-israel-falls-to-5-1001371926

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