Israeli Joblessness Is Low, but Not Quite That Low

Treasury study finds that using the broadest definition, unemployment rate was double the headline figure in 2015.

With declining unemployment, Israel has seen few workers' demonstrations of late.
Olivier Fitoussi

As the Central Bureau of Statistic was reporting yesterday that Israel’s unemployment rate remained steady in July at its lowest level in decades, the Finance Ministry released some more sobering statistics on the true extent of joblessness.

The CBS said the unemployment rate was 4.7% in July, unchanged from June. The labor force participation rate – the percentage of the working-age population holding a job or actively seeking one – climbed to 64.4% from 64.2% the month before.

But the treasury figures, which are for 2015, provide a different picture. On the positive side, the long-term unemployed – people who have been actively searching for work for more than 14 weeks, was a relatively low 1.9% – or just a third the total average unemployment rate for the year of 5.3%.

But the treasury showed that if the headline jobless rate took into account people who are no longer actively seeking employment but had been doing so sometime in the previous 12 months, the percentage of jobless in Israel last year grows to 5.9%.

If you then factor in people who could be working but have given up trying to find a job, the unemployment rate climbs to 8.1% – and women suffer more than men in this category. Their jobless rate is 8.3% versus 7.9% for males, according to treasury figures.

The rate ratchets up to the double digits if you factor in people who are working part-time because they failed to find a full-time job. Including all of those people, Israel’s jobless rate reached 10.6% last year, double the headline rate. And the gender gap was especially wide – with that widest measure of unemployment reaching 9.3% for men and 12.3% for women.

That said, Israel’s unemployment rate by every measure has been trending down since the global economic crisis briefly pushed it higher in 2009.

By international standards, too, Israel’s rate is low. Taking into account people who are unemployed and have been searching for work for at least three months, Israel’s 7.9% rate puts it in the lowest third of countries belonging to the Organization for Economic Cooperation and Development.

One place where the phenomenon of people working part-time involuntarily is particularly prominent is among older workers – people who are close to the retirement age, the Finance Ministry study found. Although the headline jobless rate for the oldest workers ages 55 to 66 is no different than for those in the prime working ages of 25-54, for both men and women the percentage who say they are working part-time because they can’t find full-time employment is much higher.