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Lower-income workers struggling to return to work, Employment Service says

Amid coronavirus lockdowns, workers who lost their jobs generally got them back; this didn’t happen with low-wage workers, whose connection to the labor market has weakened

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

Israelis protest their financial situation and the government's lack of financial aid, at the Azrieli intersection, in Tel Aviv, June 29, 2020 (TomerNeuberg/FLASH90)
Israelis protest their financial situation and the government's lack of financial aid, at the Azrieli intersection, in Tel Aviv, June 29, 2020 (TomerNeuberg/FLASH90)

Jobseekers from the lower socioeconomic ranks are finding it harder to return to the workforce, the Israeli Employment Services said Tuesday.

The number of Arab jobseekers decline just 7%, compared to an average decline of 15% in March, the agency said. The number of jobseekers from the ultra-Orthodox population declined by 14% and of non-Haredi Jews by 18% that month.

As of the beginning of April, some two months after restrictions of the third lockdown began to be lifted, the Israeli economy seems to be getting back on track and businesses are reopening. More than 300,000 people have returned to work, the agency said.

The data shows, however, that the rate of return to work has a positive correlation with the level of wages – the higher the salaries, the higher the number of workers getting back to work.

One of the reasons for this is that low-paid workers are getting unemployment benefits almost equal to their previous salaries, a phenomenon of which the employment service warned on Sunday. The bigger the gap between unemployment benefits and salary earned, the bigger the incentive to get back to work.

“As we have seen throughout the crisis, the most vulnerable populations are the weaker sections,” Rami Garor, the head of Israel’s Employment Service Bureau, said in a statement. “Without a joint effort by all government actors to take active involvement in cultivating human capital, encouraging employment, as well as establishing an effective safety net that encourages employment, jobseekers from the weaker sections of the population will find it very difficult to return to the workforce.”

At the start of the coronavirus crisis, in March 2020, all the socioeconomic segments saw a surge in joblessness. Since the exit from the third lockdown, the higher income population saw a 16% decline in jobseekers, compared to an 18% decline for those of middle income and just a 10% decline for the lower income population, 1.5 times lower than the average decline, the data showed. Thus, the number of jobseekers from the lower income bracket accounted for 36.2% of the total number of jobseekers in March, compared to 34.3% in February.

The data confirms that those most hurt by the economic crisis are those with the lower incomes, said the Employment Service. As lockdowns were imposed, many workers lost their jobs, but got them back at the exit from the lockdown. This principle, however, did not apply to lower-wage workers, who have seen their connection to the labor market weaken.

“They remain in long-term unemployment,” the statement said. This could be because the unemployment benefits became a barrier for them to get back to work, or because the business they had worked in shut down, and they “have nowhere to return to.”

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