Jerusalem Mayor Nir Barkat
Jerusalem Mayor Nir Barkat Photo by Daniel Bar-On
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Daniel Bar-On
Ultra-Orthodox protest in Jerusalem against the relocation of a gravesite at a medical center in Ashkelon on May 16, 2010. Photo by Daniel Bar-On
David Bachar
The Talpiot industrial zone in Jerusalem. Photo by David Bachar

The labor market in Jerusalem lags behind the national average in all measures related to salaries and employment rates, resulting in a poverty level twice the national average, the Bank of Israel's research division revealed Monday.

The central bank's Dr. Karnit Flug shared the findings at a conference on employment in Jerusalem.

According to the bank's figures, the percentage of working-age Jerusalemites who were employed in 2008 was only 43%, as compared to the 54% national average. That year, 41% of Jerusalem residents were living below the poverty line - nearly double the national average.

The city's demographics are a major factor in both the low workforce participation and poverty: According to census data, 35% of all Jerusalemites are Arabs and 21% are ultra-Orthodox, two communities that tend to have low employment rates.

The demographics of Jerusalem present a particularly difficult challenge in terms of fighting unemployment and poverty, Flug said.

Demographics and employment rates aren't the only factors setting the capital apart from the rest of the country. The types of jobs available, as well as salaries compared to the average rates paid for various types of work, lag behind the national averages - only 9% of Jerusalemites work in industry, about half the nationwide percentage. In addition, a relatively small percentage of Jerusalem residents work in finance, another field that pays well.

In contrast, the city has an unusually high percentage of people employed in the public service, particularly the field of teaching. The public service sector pays relatively poorly.

In addition, the study found that the average salary for a given field in Jerusalem is lower than the average salary for that field nationally. Particularly notable are the lower-than-average salaries in industry, construction and business-sector services.

"These findings explain why Jerusalem is a poor city," said Flug. "They sharpen the need to integrate various communities into the work force and to increase the salaries of those who are already working. It is extremely important to remove the barriers keeping Jerusalem's Arabs and ultra-Orthodox from working. This includes improving relevant education and child care services, and preventing discrimination in the workforce, alongside active policy via a program that would replace the Wisconsin welfare-to-work program."