Unemployment Surprises With Sharp Drop in Second Quarter

Unemployment rate drops to 6.2 percent, compared to 7 percent in the previous quarter, and 8 percent in the corresponding quarter of 2009.

Confounding expectations, unemployment fell sharply in the second quarter, dropping to 6.2% of the workforce compared with 7% in the previous quarter and 8% in the corresponding quarter of 2009.

Employment Service Tomer Appelbaum
Tomer Appelbaum

Finance Minister Yuval Steinitz commented that the government managed to halt the spread of unemployment and return to the dimensions that characterized pre-crisis levels. Speaking at a conference at the Israel Tax Authority on Tuesday, he added that by showing "behavioral flexibility," the private sector is a partner to the achievement.

The number of unemployed, defined as people actively seeking jobs through the Employment Service, fell to 191,000 in the second quarter, says the Central Bureau of Statistics. That's down from 212,000 in the first three months of the year.

Unemployment in Israel is among the lowest in the West. It's true that local joblessness is higher than before the global economic crisis. In the first three quarters of 2008, the rate ranged from 5.9% to 6.1%. But in the United States, for instance, unemployment has been running at about 10%; in Spain it's as high as 20%.

If there's a fly in the ointment, it's the proportion of people who would like to find full-time jobs but can't. The number of fully-employed (those who work at least 35 hours a week ) dropped 1% in the second quarter compared with the previous quarter, which is equivalent to 18,000 people. Meanwhile, the number of people in part-time jobs increased 6.5% over the preceding three months, which translates into 54,000 people.

In other words, one of the reasons unemployment dropped so sharply is the hefty increase of people working part-time. The number of fully-employed actually fell.

Another sign of that trend is that the average number of working hours a week per employee fell to 35.8 in the second quarter, from 36.3 in the preceding three months.

Gender revolution

Some suspect that when the economy takes a downturn, more women than men lose their jobs. Employers, goes the conventional wisdom, perceive women as being "secondary earners" in the family, so companies are less loath to fire them. But the figures do not bear out that concept. For a year, unemployment among women has been lower than among men. This last year has been the first in Israel's history when more men were unemployed than women (106,000 men in the second quarter and 85,000 women).

Unemployment among men fell to 6.5% in the second quarter compared with 7.2% in the first. But among women, unemployment in the second quarter ran at 5.9%, down from 6.7% in the first quarter.

During the second quarter, the average number of people in the civilian workforce rose to a record high of 3.08 million, an increase of 1.2% from the first three months of the year, and 2.5% year over year.