Israel Pours Billions Into Employment but Has No Idea How Many Are Jobless

Meirav Arlosoroff
Meirav Arlosoroff
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The Israeli Employment Bureau, June 3, 2018
The Israeli Employment Bureau, June 3, 2018Credit: The Israel Employment Bureau
Meirav Arlosoroff
Meirav Arlosoroff

How many unemployed are there in Israel at the moment? Somewhat embarrassingly, there are lots of different answers: 427,000 based on the Central Bureau of Statistics’ limited definition; 520,000 based on its expanded definition; just over 500,000 according to the National Insurance Institute; and 800,000 if you ask the Employment Bureau. These are gaping differences of some 370,000 people.

This is not the only embarrassment regarding the unemployment statistics during the coronavirus crisis. The Employment Bureau found that most of the job seekers are from disadvantaged groups, and only 10% have a college degree. But the Bank of Israel found an entirely different result: 40% have academic degrees, meaning it’s the middle class that has been hit the hardest, not the lower classes.

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Then there’s the question of whether the hardest hit are young people, 28 or younger. The Employment Bureau says yes, the Central Bureau of Statistics and National Insurance say no. And how many workers have been pushed out of the hotel and hospitality industry due to this crisis that shuttered global tourism, and thus need emergency support from the government? Good question. No one knows how many people were in this industry before, and no one knows how many are now unemployed.

“The situation is exasperating,” says a senior public servant on the panel drafting the government’s response to the massive employment crisis. “This is 2020, we’ve spent billions of shekels over the years on employment policy and we’re spending tens of billions right now – and we have no idea on what. There are no data to work with. How did we set any policy over the previous decades with such poor data?”

The employment panel, which includes representatives of the Prime Minister’s Office, the economy and labor ministries, the Bank of Israel, the National Economic Council, National Insurance, the Employment Bureau and the Central Bureau of Statistics, is charged with finding a way to reduce unemployment. But as soon as it began its work, it became clear that it couldn’t set policy because it’s not clear how many unemployed there are, or what fields they worked in.

Three bodies collect unemployment data – the Central Bureau of Statistics via a survey, based on international criteria; the Employment Bureau and National Insurance work off the number of people they’re serving.

People declare they’re unemployed at the Employment Bureau, and based on this they claim unemployment pay from National Insurance. These two bodies should have the same data. But they don’t. It’s horribly embarrassing, but each one has a different figure for the number of unemployed, and they also have different criteria for determining who’s unemployed.

The two bodies don’t communicate, don’t share data and don’t even cooperate in terms of easing the bureaucracy that the unemployed face. Thus, people who need unemployment pay need to show up at both the Employment Bureau and National Insurance Institute. One million Israelis unemployed due to the coronavirus pandemic filled out forms declaring that they were unemployed or on unpaid leave at both the Employment Bureau and National Insurance Institute – instead of going through the process only once.

“Each body creates statistics that fit its operational needs and do not reflect official unemployment numbers, which creates confusion among the government and the public, adding to the current uncertainty. Furthermore, the bodies do not share data,” states the panel in a report.

Due to a lack of choice, the panel had to delve deep into the data. It found that the different definitions explained only part of the difference in numbers. The Employment Bureau counts everyone who comes for services, including someone with several jobs who lost one of them, long-term unemployed people who may no longer be looking for jobs and receiving income guarantees, and unemployed who are not eligible for unemployment pay because they’re too young and haven’t been working long enough. That explains part of the gap.

But the main issue is that the Employment Bureau doesn’t know when people have found work. Hundreds of thousands of people on unpaid leave apparently returned to work without informing the Employment Bureau. The result is that this body’s unemployment figure is likely inflated. By how much? It’s not clear.

In short, when it comes to information systems, Israel is somewhere between Zimbabwe and Bangladesh. All this talk about how Israel should be emulating Germany’s government support for workers and businesses during the crisis is hollow. Israel couldn’t do it, because it lacks the data.

“There’s no 1 million unemployed, or even 880,000,” say panel members. “Each one of the three bodies – the Tax Authority, National Insurance Institute and the Employment Bureau – is like a feudal lord. Each one has its own form, its own definitions and no cooperation between each other.”

It recommends setting up one database with crosschecked figures and coordination between bodies. But this isn’t enough when crucial data is missing. Thus, the committee wants to mandate that employers report salaries for individual workers every month, and all report their industry. It’s more bureaucracy, but there’s no choice.

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