Hundred Days' Grace

If you work in the private sector, you're probably afraid for your job. That's how it is these days, as recession looms large. Unemployment supports your fear: the number of benefit applicants jumped 50% in January 2009 compared with the average for 2008.

Worry not, taxpayer. Only a fraction of the newly unemployed will get the benefits they seek.

At year-end 2008, only 24.9% of Israel's jobless were receiving benefits. The other 75% had to lump it. They'd either "maxed out" their benefits, having not found work in the 175-day maximum period for benefits (that's less than half a year, and most people don't get benefits beyond 100 days), or they weren't eligible in the first place.

The National Insurance Institute compared Israel with 17 other countries and found that only in Britain and Canada are benefits granted for shorter periods. Most of the rest provided benefits for a year. Holland and Denmark provided help for three to four. Compare that with Israel's three and a half months.

Worse, Israel's criteria are far stricter. It is dreadful to find that most of the people the National Insurance rejects are the weakest workers, such as day workers, who haven't accrued enough working days to be eligible.

To be eligible, the applicant must have worked for 300 days out of the 547 days preceding the request, which means six days a week for a year. Almost no day worker in Israel can meet that criteria, yet his employer will deduct unemployment insurance from his pay nonetheless.

We can assume that unemployment will spike in the present harsh economic climate, which means the number of jobless left to dangle by the state will spike too. The National Insurance estimates that if unemployment reaches 8% of the workforce, that will be 39,000 people without assistance. If unemployment rises to 12%, then the number of people without work or help will reach 122,000.

In fact the Finance Ministry, prime minister's office and National Insurance agree that eligibility terms need to be changed, to help these weakest workers, who are likely to be among the worst hit by recession. Yet the accords being formulated would raise eligibility from 25% of unemployed workers to just 30%, leaving 70% to languish.

Even so, with three-quarters of the jobless getting nothing, the unemployment benefits department at the National Insurance is desperately in deficit. The reason is, as we intimated, that tiny unemployment insurance provision. It's 0.25% of pay here, compared with 2.33% in Belgium and 8.25% in Holland, for instance. No wonder Israel has such mean unemployment insurance.