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COVID-19 crisis plunges 50,000 Israeli households below poverty line – minister

Conference attendees hear of ‘meteoric’ jump in requests for food assistance, and unemployment that will stay high with just one opening for every 16 jobless people

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

A man wearing a protective mask walks by a sign stating the number of unemployed in Israel, alongside the word 'Enough!!' in Tel Aviv, on July 22, 2020 (Miriam Alster/Flash90)
A man wearing a protective mask walks by a sign stating the number of unemployed in Israel, alongside the word 'Enough!!' in Tel Aviv, on July 22, 2020 (Miriam Alster/Flash90)

The coronavirus pandemic has pushed almost 50,000 households in Israel below the poverty line and in October there was a grim ratio of just one job opening for every 16 unemployed people, attendees at an economic conference were told on Tuesday.

“The economic crisis wrought by the coronavirus is unprecedented in its scope and strength,” Minister of Labor, Social Welfare and Social Services Itzik Shmuli said at the Eli Hurvitz Conference on Economics and Society for 2020, organized by the Israel Democracy Institute. “Two and a half million Israelis have been economically hurt by the crisis, almost 50,000 households are plunged below the poverty line and some 100,000” are now closer to poverty.

“Tens of thousands of families” have seen their worlds collapse and are now knocking on the doors of the welfare services, Shmuli said.

“We see a meteoric jump of 2.5 times more requests for food assistance, a 41% rise in bankruptcy requests, and a 60% surge in opening welfare files,” Shmuli said. The economic crisis has also led to other consequences, including a 300% rise in family violence, plus loneliness among the elderly and sexual assaults on children.

“The consequences of all of this will accompany us for many years as a society,” Shmuli warned.

Minister of Labor, Social Welfare and Social Services Itzik Shmuli speaking at the Eli Hurvitz Conference on Economics and Society for 2020; December 15, 2020 (YouTube screenshot)

While those with lower salaries have borne the brunt of the crisis, it has affected all sectors of the economy, the attendees at the conference were told.

Unemployment, which surged beyond 1 million after the first lockdown in March and April, continues to be high, and the Finance Ministry expects it to stand between 7.2% and 10.2% at the end of the year, depending on whether the virus is curbed or continues to spread rapidly, said Shira Greenberg, the chief economist at the Finance Ministry.

Shira Greenberg, chief economist of the Finance Ministry, attends a press conference at the Finance Ministry office in Jerusalem, September 23, 2019. (Flash90)

“There is a crisis that is very, very big and significant regarding the work market,” Greenberg said at the conference. Even after economic restrictions were largely lifted, she said, as of October, there were 480,000 more people without jobs than before the crisis.

In October, for every 16 people who were unemployed there was just one job available, with a total of 55,000 available jobs, she said. “This underlines how hard it is today for people who are unemployed find a job.”

Before the crisis hit, there were 92,000 available jobs, with a ratio of 1.4 unemployed people per job.

“This is a very significant drop in availability of jobs, and this is the main problem of the crisis,” she said. Greenberg added that Israel is faring worse than other OECD nations on this front, with the decline in jobs surpassing those in other developed nations.

Previous economic crises, both globally and in Israel, have shown that the job market tends to recover slowly, over a number of years.

The job market will not return to normal once the country’s restrictions are lifted, Greenberg warned. “In our opinion we are talking about a process of recovery that will be much longer.” The market is undergoing an efficiency process in which employers are getting used to working with fewer employees, and more bankruptcies and businesses closures are shrinking the number of available jobs.

Even workers who were placed on unpaid leave rather than fired outright will find it hard to get their jobs back after the break, she said.

“All of this creates concern about chronic unemployment,” she said, referring to people who have been without a job for a year or more. “They lose the relevant skills; they lose the ability to come back to the job market — and this must be addressed.”

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