Israel’s low pre-corona era unemployment rate of 3.4 percent will not return soon. Officials fear a 10 percent jobless rate when the crisis ends, with those under 34 most affected.
By Paul Shindman, World Israel News
The official in charge of Israel’s National Employment Service warned on Thursday that after the coronavirus epidemic finally ends. the unemployment rate may only go down to 10 percent, Ynet reported.
Half of the workers who registered with the agency as the crisis hit are 34 and younger, National Employment Service CEO Rami Garor said.
There are fears that Israel might face the scenario that occurred in Europe after the 2008 economic crisis when the unemployment rate of young people was 20 percent. Employers chose those with experience when they returned to normal operation.
Garor said before the pandemic there was talk about adjusting to changes in the labor market that included some professions disappearing. But emergency health measures to prevent the spread of the virus have crippled Israel’s previously robust economy. The shutdown of the education system, tourism industry, shopping malls and places of entertainment has cost hundreds of thousands of jobs usually filled by younger people.
“The (coronavirus) crisis will accelerate the change. We will see more automation processes and remote service delivery,” Garor said. On Tuesday he warned the health crisis might throw another 200,000 people out of work and bring the jobless total to one million by the start of the Passover holiday next week.
Government-enforced closures followed by new restrictions this week to keep all non-essential workers at home have brought Israel’s era of a rosy economy coupled with low unemployment to a cataclysmic end.
With a population of 9.2 million, a significant number of workers (660,000) registered for unemployment benefits since the beginning of March, bringing the total number of jobless to 815,000, an unemployment rate of 20 percent, Ynet reported.
Current estimates are that once the pandemic ends and the country returns to normal, the economy will have to deal with some 300,000 unemployed.
“We are not fooling ourselves. It is clear that the more stringent rules and additional restrictions in the struggle against coronavirus are liable to result in more waves of unemployment,” Garor told Globes.
Garor pointed out that Israel’s labor market had already begun to show signs of weakness last year, but that has now exploded into unprecedented numbers.
“We had seen employers start to sit on the fence and absorb fewer workers (last year), and the number of job vacancies had dropped,” Ganor said.