Unemployment still high despite cut to pandemic benefits

Government report says jobless rate last month climbed to 9%, even after most support was removed; Delta variant may cause further losses

Luke Tress is a JTA reporter and a former editor and reporter in New York for The Times of Israel.

Jaffa Street in Jerusalem, July 29, 2021. (Olivier Fitoussi/Flash90)
Jaffa Street in Jerusalem, July 29, 2021. (Olivier Fitoussi/Flash90)

Israel’s unemployment rate remained high last month, despite the government ending most pandemic support measures.

The unemployment rate in the first half of July was nine percent, up from 8.8% in the second half of June, the Central Bureau of Statistics said on Monday.

A total of 383,700 people were unemployed and on unpaid leave due to COVID-19 in the first half of July, according to the CBI.

Before the pandemic, an estimated 150,000 Israelis, or 3.5%, were unemployed.

There are some 130,000 job vacancies nationwide, indicating a gap between employers and job-seekers, and a need for retraining for some of the unemployed.

The unemployment rate remains especially high in the hospitality industry and in Tel Aviv, according to the Globes business daily.

One factor that may be boosting the jobless rate is the fact that schools are closed for summer vacation. Schools often cut some jobs during the summer break, and some parents may choose to remain home, instead of paying for expensive daycare or camp programs.

The data released Monday reflects the unemployment level last month, before the Delta variant became widespread, which could further boost the unemployment rate. A top health official warned Monday that the rise in cases caused by the highly contagious variant could spur the government to tighten some regulations, and some people may be fearful of returning to work.

The government ended unemployment benefits for most people under age 45 who lost their jobs due to the pandemic in a stormy Knesset session at the end of June.

At the time, the National Insurance Institute said Israel had paid out over NIS 39 billion ($12 billion) in unemployment benefits to 1.2 million Israelis since the start of the pandemic.

According to the National Insurance Institute, anyone who became unemployed after July 1 will be assessed according to the standard unemployment laws that existed pre-COVID. But the period of time an employee must have worked before being able to claim unemployment was lowered from 12 months to six months.

Finance Minister Avigdor Liberman had pushed for sweeping changes to the existing unemployment model in order to push people — particularly the young — to return to work.

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