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The most recent data published by the Government Employment Service wiped the smiles off faces at the Finance Ministry. It turns out that the number of job-seekers registered with the service rose 2.2 percent in July, to 233,000.

There was also a sharp increase in the number of hard-core unemployed, people who have been jobless for nine months or more, to 69,000. In response to this grim data, MK Ran Cohen (Yahad) declared: "The rise in the number of job-seekers demonstrates the government's complete failure to create jobs."

And indeed, there is a problem here. The Central Bureau of Statistics' unemployment figures are not declining, and neither are those of the Employment Service. On the other hand, data has been published showing that the economy is growing at a rate of 4 percent a year, and that in the last 12 months, 70,000 Israelis have joined the labor market. So how does all this fit together?

I checked into the matter by speaking with a number of small contractors, who told me of a new development in the construction industry: Due to the expulsion of foreign workers, Arab Israelis, and even Jews, have returned to the renovation business. However, all of them insist on being paid under the table. None of them is willing to accept a legal pay slip. There is also one day a week on which they do not show up for work. That is the day on which they go to the Employment Service to declare themselves unemployed. Some of the Israeli house cleaners who have replaced the foreign workers are also only willing to work under the table, for the same reason.

I am not trying to say that the unemployment problem has been solved. It obviously has not - and it remains a serious and pressing one. But it is also worth checking to see whether all those who currently receive unemployment compensation (some 100,000 people) or guaranteed income (some 150,000 people) are in fact not working.

To date, this has been investigated only by the National Insurance Institute itself. At first, eight investigators were employed on this matter; later, their number increased to 32. And they did indeed discover that many people submit false claims.

One examination of 100 new claims for unemployment or guaranteed income in the Be'er Sheva region found that fully 92 were fake. Some of the claimants were working; others had a car; some "single parents" lived with their spouses; and three people lived overseas.

Therefore, the finance minister ought to allocate funds to the police (and not the NII) to set up a unit to investigate all recipients of unemployment and guaranteed income - not on a random basis, but all 250,000 of them. They all have names and addresses.

This is a justified social policy, because it is inappropriate for the NII to be financing false claims. With the money that is saved, it would be possible to help the genuine unemployed through professional training and increased assistance. But beyond that, anyone who is "caught" working ought to be congratulated, since he is a diligent person who is trying to improve his situation through work.

Therefore, he should be given special assistance, such as an income tax exemption for a certain period, to get him used to a life of work without welfare. After all, why should only Osem get tax breaks?