Don't Pop Any Corks Just Yet

Avi Rabinovitz, 31, yesterday assumed his new position as a software programmer at a high-tech company in Herzliya, just a week after sending it his resume. It's the third job he's taken this year, and not because he was fired from the other two: He chose to leave, in order to improve his working conditions, in terms of pay and challenge.

The fact that he allows himself to flit from job to job shows how much the labor market has improved. It indicates that employees can call the shots again, not employers, as had been the case in 2008 and 2009. That in turn indicates demand for workers is outstripping the supply. It's not only true of high-tech but of low-tech as well, though the improvement is not uniform in all branches.

The reasons unemployment has been declining from mid-2009 lie in the state of the economy. When economic indicators such as exports, credit card purchases, tourism hotel nights, import of raw materials, redemption at retailers and what not are rising powerfully, it follows that jobs will be created. In 2009, manufacturers and other employers were uneasy and didn't hire. In the second quarter they evidently felt more confident and did take on new staff, and moreover, they were slower to fire.

It is good when unemployment falls, but Israel cannot be sanguine. First of all, the state of major export targets, the United States and Europe, remain uncertain. Israeli exports could fall hard, global tourism could dwindle anew, and Israeli employers will be impacted. Unemployment could rise again as soon as this very quarter. Also, the figures shows that unemployment remains very high in Arab towns and development areas, a trend that hasn't changed in years. As of June 2010, nearly 39% of the workforce in Rahat was unemployed, and in Umm al-Fahm the rate was 30%. It isn't time to pop any corks just yet.