Young Israelis have been the biggest victims of the coronavirus unemployment. The jobless rate for them is higher than for the overall labor market because many of the businesses that employ them have yet to return to normalcy and/or are reducing payrolls, such as restaurants and catering. The young have been at the forefront of the protests that have erupted in the last weeks.
The solution, as agreed upon on Tuesday by Finance Minister Yisrael Katz and United Torah Judaism MK Moshe Gafni, the chairman of the Knesset finance committee, will boost jobless benefits for the young, but the biggest beneficiaries are likely to be the ultra-Orthodox.
The two decided that benefits for jobless people under age 28 will be raised to the same level as for older unemployed, but the increase will only apply to unemployed young people with children. Those tend to be Haredi or Orthodox, raising criticism that the decision was a political one aimed at helping Gafni’s ultra-Orthodox constituency.
The decision came shortly after the finance committee approved Interior Minister Arye Dery’s proposal to issue food coupons worth 700 shekels ($204) to families qualifying for a discount on the municipal taxes (arnona). Critics said the criteria for the coupons also favor the ultra-Orthodox.
Since the outbreak of the coronavirus, some 223,00 Israelis under age 28 have qualified for unemployment aid, or 25.6% of the total, according to the State Employment Service. Just over half have returned to their jobs, but that still leaves 110,000 still without work, or 22% of the total.
The finance committee’s decision means that a parent under age 28 who was earning 6,000 shekels a month before being laid off or put on unpaid leave will receive 4,320 shekels a month in jobless benefits. A single under 28 will get 3,280 shekels, or 30% less.
“There’s no justification or logic to give preference to young people with children except out of political considerations,” said Uri Matuki, chairman of the trade union division of the General Federation of Working and Studying Youth.” Hundreds of thousands of young people don’t have the money to live with dignity.”
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Ben Levavi, 24, is one of them. Before the pandemic, he was earning 7,000 shekels a month as a waiter in Tel Aviv while attending university. In the middle of March, he was put on unpaid leave and began receiving unemployment pay of 3,060 shekels.
“I need 3,500 a month just to cover my living expenses even when I’ve cut them to the minimum and buy just food basics,” he said. He also has a 13,000-shekel annual tuition to cover, which he paid in monthly installments. Because Levavi and his roommates are all jobless and at home all day, their electricity and water bills have jumped.
In June, he returned to work, but this week he learned he is again being put on unpaid leave. He’s been expressing his distress at demonstrations opposite the Prime Minister’s Residence. “I haven’t yet slept overnight at Balfour because I am currently taking exams, but I’ll get there,” he says.
According to the Central Bureau of Statistics, the average age for giving birth in Israel in 2018 was 28.6 for Jews and 24.6 for Arabs. It doesn’t break down figures among Jews, but it is well known that the average age for marriage and a first child is much older for secular Jews than for religious ones.
The average age for marriage attests to that. The Israel Democracy Institute, using statistics bureau data, estimates that among Israelis aged 22-24, 54% of ultra-Orthodox were married, compared with just 5% who are not Haredim. For the ages 25-29, the rates were 84% and 34%, respectively.
At the finance committee meeting on Tuesday, coalition chairman Miki Zohar (Likud) said to Gafni, “I look forward to the days when the cooperation between Likud and Rabbi Gafni will return to what it once was.” Gafni jokingly replied that “there are things that are irreversible,” to which Zohar responded, “Don’t say that. You’re the flesh of our flesh.”
The fact is that cooperation between Prime Minister Benjamin Netanyahu’s Likud and the Haredi parties is as strong as ever and has yielded economic benefits to the ultra-Orthodox community. The new rules on benefits for the young unemployed is the latest example and will benefit UTJ voters.
The official logic behind the decision is that parents with children have more expenses. But at the same time it’s another case of the Israeli government encouraging childbirth, whose rate in usually high in the Haredi community. Under-28 singles don’t have anybody representing them in the Knesset, so they come out of the “equalization” process unequal.
Against that, some assert that the measure will address another problem – the low labor force participation rate among Haredi men – by reducing the economic loss if they do hold a job. With the onset of the coronavirus and the wave of layoffs, many expressed concern that the gap between pay and unemployment benefits would encourage ultra-Orthodox men to forsake the job market for the steadier income of government allowances.
Gafni himself has been hearing many complaints from young Haredim about this. Many have two or three children and unemployment benefits can’t begin to cover their household expenses.
The differential unemployment benefits between younger and older workers dates back to 2007, when they were reduced by one-third for workers aged 20-28 and the eligibility period for them was cut to 67 days from 100.
Under the extended unemployment benefits program announced at the end of June, all Israelis can continue to get aid until June 2021.
At the time the benefits were cut back, the treasury, which was behind the legislation, reasoned that younger unemployed people face lower barriers to re-entering the job market than older ones. The government shouldn’t be giving them any incentives to stay jobless. But in the coronavirus economy, those rules are no longer relevant – many face long-term unemployment.
“As every decision-maker knows now, many more young people are looking for work than the market can absorb in the emergency situation we’re in,” said Matuki.
“We have to help them as we help every worker in Israel. We’re talking about the public that’s the future of the country – newly released soldiers, students and so forth – who are getting less compensation and don’t have enough to live on. Abandoning them like this will seriously hurt them and no less hurt the Israeli economy. The damage will be irreversible.”