Finance Minister Faces Backlash After Lauding Netanyahu Government for Creating Jobs

The finance minister said unemployment fell in past three years, and was criticized both inside and out of the governing coalition.

Finance Minster Yuval Steinitz whipped up a storm of criticism on Sunday inside the coalition and out after he said unemployment in Israel had fallen in the last three years.

Since Prime Minister Benjamin Netanyahu formed his government, some 330,000 new jobs have been created in Israel, twice the rate of previous years, Steinitz said on Sunday at meetings of the cabinet and Likud ministers.

Steinitz contrasted Israel's achievements in the labor market with the United States and Europe, saying that the unemployment rate here had not risen even as the rest of the world has suffered severe financial problems and rising joblessness. He asserted that the rate had fallen.

His remarks came days after the Israel Employment Service reported that the number of layoffs reached more than 16,000 in July, the highest in three years. Some economists said the spike in those figures for last month were one-off events that do not reflect labor market trends. They pointed to large numbers of unfilled job openings, especially in high technology.

Nevertheless, the seasonally adjusted unemployment rate has, in fact, been creeping up since the middle of 2011 when it was 5.6% to 7.0% in June, the last period for which the Central Bureau of Statistics has figures.

The government is at pains to present a brighter economic picture as growth slows, and it has been forced to undertake a series of budget cuts and tax rises that will hurt consumers in order to close yawning deficits this year and next.

Last week the government launched an advertising campaign featuring four families who were helped by government benefits offered in the wake of last year's cost-of-living protests - namely, the law granting free education for children starting at age 3 and new tax credits that save working parents with children under 3.

The campaign has been raising hackles, and people who participated in it also said its message doesn't necessarily represent their opinions.

Interior Minister Eli Yishai, who leads the Shas party, pointedly disagreed with Steinitz, citing the July figures for firings as evidence that the trend is changing for the worse. He urged the government to take immediate steps to avoid problems in the coming months of growing joblessness.

Steinitz's remarks also elicited criticism from Labor Party leader Shelly Yacimovich. "I suggest that Steinitz meet with each one of the more than 16,000 new unemployed that were added just in the last month, look at them straight in the eye and retract what he said about 'there is no unemployment in Israel,'" she said.

Yoal Hasson of the opposition Kadima party said that "Steinitz has still not awoken from the dream he has been having during the last few years."

This is a dream "that he and [Benjamin] Netanyahu sold to the public, which said that their economic policies are a model for praise and imitation, when in fact they have emptied the government's coffers, widened social gaps and hurt the lowest income groups and the middle class, and caused a major rise in unemployment," Hasson said.

Academics' unemployment office in Tel Aviv.
Guy Raivitz
Finance Minister Yuval Steinitz.
Ofer Vaknin