[Israel] Why young people are not returning to work

A press release from the Employment Service suggests that Israel’s COVID-19 ‘safety net’ may be working a little too well. The Employment Service said that, despite the nationwide unemployment rate dropping to 8.9 per cent in the second half of March, the percentage of young people returning to work is barely moving, The Jerusalem Post reports.

The Halat (unpaid leave) programme for unemployment benefits was an economic safety net for hundreds of thousands of unemployed Israelis during the COVID-19 pandemic when the unemployment rate averaged around 16 per cent. (Link via original reporting)

The success of the vaccination campaign is allowing the economy to reopen and businesses are seeking new employees in record numbers. However, there is a shortage of people interested in working. 

The Central Bureau of Statistics reported last week that Israel had a record 112,500 vacancies available in March, the highest-ever recorded figure. People under the age of 34 represented 47.4 per cent of all unemployed workers in March, the same ratio as in February. This despite a huge March spike in vacancies for fields where young people are over-represented, including restaurants, hotels and entertainment industries.

The Employment Service said that the reopening of those sectors after the third lockdown did not alter the makeup of the employment pool, indicating that younger people are not motivated to return to work.

The emergency COVID-19 legislation enacted in 2020 guaranteed unemployment benefits of around 70 per cent of income until the end of June 2021. Many people have reportedly been treating these circumstances as a free holiday.

With just two months until the deadline and no clarity about what benefits will await job-seekers after June 30, the Employment Service wants the Finance Ministry to take a firmer approach to get people back to work.

Employment Service CEO Rami Graur said, “The data confirms what we have argued all along. Extending unemployment benefits has saved hundreds of thousands of job-seekers and employers from collapsing. But with the economy reopening, the safety net has become an employment barrier for quite a few job-seekers, including the young.

“In July, we must move to an effective unemployment benefit model that will encourage a return to work,” Mr Graur continued. “We need a time-limited model, with different benefit rates according to age and family status, and with proper employment evaluations, to get back to the original purpose of the benefits as a safety net for those who need it.”

Finance Minister Israel Katz, speaking last week, said as a result of the rapidly improving economic situation unemployment benefits would be reduced by 10 per cent after June 12, the day on which benefit payments for May will be made. A comprehensive plan for continuing benefits after June will be published at that time, the minister said.

A press release from the Employment Service suggests that Israel’s COVID-19 ‘safety net’ may be working a little too well. The Employment Service said that, despite the nationwide unemployment rate dropping to 8.9 per cent in the second half of March, the percentage of young people returning to work is barely moving, The Jerusalem Post reports.

The Halat (unpaid leave) programme for unemployment benefits was an economic safety net for hundreds of thousands of unemployed Israelis during the COVID-19 pandemic when the unemployment rate averaged around 16 per cent. (Link via original reporting)

The success of the vaccination campaign is allowing the economy to reopen and businesses are seeking new employees in record numbers. However, there is a shortage of people interested in working. 

The Central Bureau of Statistics reported last week that Israel had a record 112,500 vacancies available in March, the highest-ever recorded figure. People under the age of 34 represented 47.4 per cent of all unemployed workers in March, the same ratio as in February. This despite a huge March spike in vacancies for fields where young people are over-represented, including restaurants, hotels and entertainment industries.

The Employment Service said that the reopening of those sectors after the third lockdown did not alter the makeup of the employment pool, indicating that younger people are not motivated to return to work.

The emergency COVID-19 legislation enacted in 2020 guaranteed unemployment benefits of around 70 per cent of income until the end of June 2021. Many people have reportedly been treating these circumstances as a free holiday.

With just two months until the deadline and no clarity about what benefits will await job-seekers after June 30, the Employment Service wants the Finance Ministry to take a firmer approach to get people back to work.

Employment Service CEO Rami Graur said, “The data confirms what we have argued all along. Extending unemployment benefits has saved hundreds of thousands of job-seekers and employers from collapsing. But with the economy reopening, the safety net has become an employment barrier for quite a few job-seekers, including the young.

“In July, we must move to an effective unemployment benefit model that will encourage a return to work,” Mr Graur continued. “We need a time-limited model, with different benefit rates according to age and family status, and with proper employment evaluations, to get back to the original purpose of the benefits as a safety net for those who need it.”

Finance Minister Israel Katz, speaking last week, said as a result of the rapidly improving economic situation unemployment benefits would be reduced by 10 per cent after June 12, the day on which benefit payments for May will be made. A comprehensive plan for continuing benefits after June will be published at that time, the minister said.