Israeli unemployment expected to hit 400,000 this summer

Israel’s government is preparing to register 400,000 of those on unpaid leave as permanently unemployed.

By Paul Shindman, World Israel News

Even as the economy is coming back to life, Israel’s government is preparing for a huge surge in unemployment this summer when many of those currently on unpaid leave will be registered as permanently unemployed, Kan News reported Tuesday.

The easing of health restrictions has seen 300,000 people return to work and Finance Ministry officials said there were few reports of firings, but 900,000 Israelis are still on unpaid leave.

The forced closure of much of the economy caused unemployment to skyrocket to a record 27.5 percent at the beginning of May as health restrictions had shuttered the education system, stores and entertainment places.

Israel’s critical incoming tourism industry, which last year hosted a record number of foreign tourists, has been among the hardest hit. A large percentage of the hundreds of thousands of workers are facing a bleak future as the tourism industry will take years to recover.

“Starting next week, we will begin summoning people to the employment bureaus and preparing for some 400,000 unemployed in August,” said the Finance Ministry’s Jacob Eichler. Those workers are currently registered as being on unpaid leave, but as government aid packages to specific troubled industries like tourism and entertainment run out, companies will have no choice but to terminate those positions.

Despite much of Israel’s economy opening back up, some sectors like travel are coming to grips with the new reality of a world that might be dealing with the pandemic for several years.

A government bailout of El Al Airlines is expected to save the company from bankruptcy, but several thousand of the 6,300 workers will most likely be laid off. The snowball effect on tourism from the massive drop in international travel means a large percentage of airport workers, hotel workers and others in related jobs will also be jobless.

Before the coronavirus pandemic hit, Israel’s formerly robust economy was running at full throttle with a healthy growth rate and low unemployment that was at 3.4 percent at the beginning of the year.