Employment Service website crashes

Up to 5,000 Israelis filing for unemployment every hour after surge in layoffs

Authorities expect 400,000 to apply for benefits this month at cost of NIS 2 billion; unemployment rate could cross 30%

Workers wearing protective clothes disinfect a public playground in Bat Yam as part of measures to prevent the spread of the Coronavirus, March 18, 2020. (Tomer Neuberg/Flash90)
Workers wearing protective clothes disinfect a public playground in Bat Yam as part of measures to prevent the spread of the Coronavirus, March 18, 2020. (Tomer Neuberg/Flash90)

Israel’s Employment Service has seen a surge in unemployment applications in recent weeks as the coronavirus pandemic wreaks havoc on the national economy and global markets.

Since the beginning of March, when the virus’s effects began to take their toll on Israel, some 180,000 Israelis filed for unemployment, 7.5 times the number that registered in the month of February.

On Wednesday, 66,000 Israelis filed for unemployment between 12 a.m. and 12 p.m. — 5,000 an hour — crashing the Employment Service’s website.

The Employment Service expects 400,000 newly unemployed people by the end of March. The cost of unemployment benefits in April is expected to be NIS 2 billion ($523 million), seven times higher than current costs, which are NIS 800 million-NIS 900 million ($209 million-$235 million) per month.

The National Insurance Institute expects to see between 500,000 and 1.2 million Israelis unemployed due to the crisis, National Insurance Director Meir Shpigler said Wednesday.

The estimates mean an unemployment rate of non-self employed Israelis of between 13% and 32%.

Before the crisis, the service supported some 80,000 people on average.

It’s unclear if the average payment per person will change.

An Israeli wearing a face mask walks in the city center of Jerusalem on March 17, 2020. (Olivier Fitoussi/Flash90)

Some 84% of the newly unemployed registrants were put on unpaid leave, 11% were fired, 2% quit and 3% cited other reasons.

Some 17,300 were general workers, 14,500 worked in education, 11,700 in sales, and 7,600 in restaurants and catering. Over 3,000 workers each filed from the hospitality and tourism sectors, administrative work, customer services, security, finance and manufacturing.

Meanwhile, the Finance Ministry forecast a drop in government tax income of as much as NIS 50 billion ($13 billion) from its pre-crisis projected income of NIS 330 billion ($86.6 billion), according to the Calcalist business daily, citing a Finance Ministry source.

The ministry expects a drop of NIS 5 billion ($1.3 billion) in tax income this month.

The Finance Ministry estimated Monday that the total damage to Israel’s economy caused by the coronavirus pandemic will amount to NIS 45 billion ($12 billion) and wipe out any projected growth for the year.

The estimate came after Prime Minister Benjamin Netanyahu announced new restrictions to stem the virus outbreak on Monday night, and before the Health Ministry announced new more drastic measures on Tuesday.

The government on Monday ordered all business with more than 10 people to curb in-office staff by 70% and put the public sector on emergency footing, adding to measures that had already largely curtailed much of Israel’s economy.

Major employers released most of their staffs this week, including El Al, which put 5,500 workers — over 80% of its staff — on unpaid leave, and Castro, Israel’s largest closing chain, which put 6,000 on unpaid leave.

The Tel Aviv Stock Exchange has plummeted since the start of the crisis, with its TA-35 index falling over 30% in the past month.

The widened restrictions came after the Health Ministry voiced support for a total lockdown of the country. Treasury officials, by contrast, have been strongly opposed to a full shutdown.

The Health Ministry introduced sweeping new restrictions to curb the spread of the coronavirus on Tuesday, instructing Israelis not to leave their homes unless absolutely necessary, but stopping short of imposing a mandatory lockdown. The Transportation Ministry said it was reducing public transportation at night and on weekends.

Israel has banned gatherings of over 10 people, closed schools, forced all Israelis entering the country into a 14-day quarantine, and ordered the closure of all malls, restaurants and cafes (with takeout permitted) to contain the outbreak.

Israel has confirmed 433 cases of the virus as of Wednesday evening, and no deaths. The vast majority of the patients — 404, or 93.7% — display light symptoms and another 11 are no longer ill, the Health Ministry said.

Six people are in serious condition, and another 12 are moderately sick.

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