Israel’s unemployment rate tops 21 percent

Some 723,000 people have lost their jobs since the beginning of March; budget deficit could hit 15.5% in the event of full 12-week lockdown

A view of the empty Mahane Yehuda market in Jerusalem, March 26, 2020. (Yonatan Sindel/Flash90)
A view of the empty Mahane Yehuda market in Jerusalem, March 26, 2020. (Yonatan Sindel/Flash90)

Israel’s unemployment continued to climb rapidly amid the coronavirus crisis and as of Thursday evening 21.2 percent of workers in the country were out of a job.

Since the beginning of March, 723,028 people have been without work, 90% of them put on unpaid leave. In the past 24 hours 38,112 people have joined the ranks of the unemployed.

Prior to the coronavirus outbreak, unemployment in Israel was at a record low of under 4%. The total number of unemployed including those out of work prior to March now stands at 880,879.

Employment Service director general Rami Garor said the service had already processed and handed over to the National Insurance Institute [the body that pays out the benefits] some 500,000 requests “so that the citizens of Israel will be able to receive the unemployment benefits they are entitled to as quickly as possible.

Shai Babad, director-general of the Finance Minister, attends a press conference at the Finance Ministry in Jerusalem on December 11, 2017. (Yonatan Sindel/Flash90)

Garor said the Employment Service would complete the transfer of data of all those who registered for unemployment benefits by the end of the month.

Earlier this week, Garor said he expected the number of unemployed to reach as many as one million. Garor said he expected around 20% of the newly unemployed would not have a job to go back to when the crisis ends and lockdown measures are eventually lifted.

While salaried workers are covered up to 75% of their earnings, Israel’s self-employed workers are not entitled to unemployment benefits. The government is working on a package that is expected to give some 175,000 self-employed a grant of up to NIS 6,000 ($1,675) with an average expected payment of NIS 4,300 ($1,200).

Finance Ministry Director General Shai Babad told the temporary Knesset Finance Committee Thursday that the ministry would be presenting a far-reaching economic plan to Prime Minister Benjamin Netanyahu later in the day. Babad said that if the measures the government has put in place to curb the spread of coronavirus lasted for 12 weeks, the budget deficit could rise to 11.8% and if a full lockdown was in place in that period it would skyrocket to as high as 15.5%.

But, Babad said, if conditions allow people to return to work after Passover, the budget deficit could be as low as 6.5%, while if in the interim a full closure was put in place the deficit would soar to 9.3 percent.

Despite the dire figures, the Tel Aviv Stock Exchange ended the week on a positive note, bringing a close to a four-week losing streak.

The Tel Aviv 35 index of major companies climbed 3% to end the week up 4.1%, while the Tel Aviv 125 Index was up 3.38% to close the week up 6.1%.

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