As Jobless Number Climbs, Businesses Brace for Lockdown, Beg for Exemption

Tech sector should remain relatively unaffected, but lockdown could spell disaster for manufacturers, who say less than 1% of their workforce has tested positive to COVID

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A worker at the Phoenicia factory, 2019.
A worker at the Phoenicia factory, 2019.Credit: Ofer Vaknin

Israeli businesses braced for the start of a draconian lockdown, hoping that many will get exemptions to continue operations. In the meantime, the Israeli Employment Service reported a surge in benefit applications.

The lockdown, due to go into effect at 2 P.M. Friday and last for at least two weeks, will only allow essential workplaces to remain open. As of late Thursday, however, officials hadn’t detailed what workplaces would qualify apart from supermarkets, pharmacies, media outlets and “essential service providers.”

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In the run-up to the tougher lockdown, the employment service said 120,752 people had registered since September 18, when the less-strict lockdown began. Since Wednesday, 11,374 people had registered.

Nearly 80% of those were repeat job seekers, who had registered as unemployed during the first coronavirus wave that began in March.

More than 854,000 people are registered with the service, one-fifth of the labor force, it said.

Hundreds of thousands of people who lost their jobs in March haven’t returned to work, agency director Rami Grauer said. “As we’ve warned before, such a protracted period of unemployment may cause hundreds of thousands to become chronically unemployed, creating a ‘lost generation’ of young people stuck in perpetual joblessness.”

Grauer’s grim forecast came a day after the Organization for Economic Cooperation and Development predicted that Israel’s gross domestic product will contract 6% this year and grow just 2.9% in 2021. Unemployment, using the narrow definition that doesn’t include workers on unpaid leave, will reach 6.1% this year and 6.5% in 2021.

Ron Tomer, CEO of the Israel Manufacturers Association, urged Finance Minister Yisrael Katz and other ministers to be generous with exemptions for the sector during the lockdown.

Ron Tomer, CEO of the Israel Manufacturers Association, November 2, 2019.
Ron Tomer, CEO of the Israel Manufacturers Association, November 2, 2019.Credit: Hila Tomer

“Israeli industry has adopted strict work rules and social distancing that have enabled it to operate while keeping infection to a minimum; fewer than 1% of workers have tested positive for coronavirus, and most of them were infected outside of the workplace,” he said in a letter.

Unless more exemptions are granted, local manufacturers cannot ensure delivery of goods to consumers and may lose important customers, especially overseas if they cannot fulfill orders. In technologically advanced facilities, machinery has to operate and be maintained on a regular basis, Tomer said.

Israel’s key high-tech sector should be relatively unaffected by the lockdown because employees have been working from home for the past several months.

The Intel offices in Petah Tikva, near Tel Aviv, October 24, 2011.
The Intel offices in Petah Tikva, near Tel Aviv, October 24, 2011. Credit: NIR ELIAS/ REUTERS

Many of the bigger tech companies engaged in manufacturing, including Intel Israel, TowerJazz and Applied Materials, have received exemption as essential industries. So did the Israeli unit of medical device maker Medtronic.

Kobi Marenko, CEO of Arbe, a startup developing radar for autonomous vehicles, said even though his company doesn’t manufacture, staff needs to work from its offices.

“We’ve been working on rotation since March. I’ve been taking with the Israel Manufacturers Association and, to the best of my knowledge, we will be able to continue during the lockdown. If not, it will make it really difficult to supply our customers.”

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