A moment before the omicron variant arrived and reignited fears of widespread illness, Israel’s labor market showed a sharp improvement. The Central Bureau of Statistics reported a decline in the broad unemployment rate in the first half of November, to 6.7 percent, from 7.3 percent in the second half of October.
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The more meaningful news comes from the employment rate – the rate of those employed compared to those in the workforce (over age 15.) The employment rate registered a sharp jump in the first half of November to 62.1 percent, or almost 4.1 million people employed. In the previous survey in the second half of October was significantly lower and reached only 59.25 percent. However, the sharp differences stem from the biweekly format used, and the numbers for all of November may be more balanced.
Either way, if the employment rate was higher than 62 percent, this means that the coronavirus crisis has been “wiped out.” Prior to the pandemic, in January and February of 2020, the employment rate in Israel hovered around 62 percent.
The sharp improvement in the broad employment rate comes mostly from a decline in the numbers of the “regular” unemployed – those seeking work. The scope of these unemployed amounts to only 200,000 – which is to say a “narrow” unemployment rate of 4.7%. In comparison, prior to the coronavirus crisis the narrow unemployment rate ranged from 3 to 4 percent.
In addition to those seeking work, the broad unemployment rate includes workers furloughed for pandemic-related reasons (some 20,000 workers) and some 70,000 “despaired” workers whose employment was terminated during the pandemic but are not looking for work at all. Among professionals, there are some who believe this group should be deducted from the unemployment rate, as this group takes no part in the labor market. If this group is deducted, the unemployment rate drops as low as 5.2 percent.
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The jump in the employment rate in Israel comes against a backdrop of an economic recovery and soaring demand for workers. At the same time, in these very weeks the eligibility of workers 45 and older to unemployment benefits expires completely. This may have triggered the sharp rise in the employment rate at this particular time.