The unemployment rate in Israel fell to 4.7% in the first half of November, the Central Bureau of Statistics reports, down sharply from 5.6% in the second half of October. Broad unemployment (including people who stopped working at the start of the Covid crisis) also fell from 7.3% in the second half of October (292,000 people) to 6.7% in the first half of November.
The employment rate rose to 61.8% in the first half of November, up from 59.6% in the second half of October. This is a major improvement since January 2021, when the employment rate was only 51.1% during the most recent lockdown.
Ministry of Finance economists wrote, "It seems that the main factor leading to the improvement in employment since the third lockdown is the continued opening up of the economy with minimum restrictions on business activities, even during the fourth wave. It would seem that what is delaying the return of other employees to jobs is that the demand for workers is still at a relatively low level."
Bank Hapoalim economists said in their weekly survey that the salary data for September is a better indication about the job market than the unemployment figures. "Salaries in September were about 10% higher than September 2019, before Covid. Although there is an influence from the change in the mixture of jobs, the fast rise in the number of high-tech positions increases the average, but also if other industries are examined that are less influenced by technology like construction, and hospitality and catering services, the salary rises are high.
The difficulty in filling jobs with low salaries is high and this strengthens the inflationary pressures in the economy. The fall in the supply of workers is a global phenomenon that stems from conceptual changes created by the lockdowns, like the preference of leisure over work. We believe that this trend was also influenced by the wealth effect, in other words the rise in prices on financial markets and real estate prices, which harms the incentive to go out and work, especially in the case of second jobs, or employees who are close to retirement age."
Published by Globes, Israel business news - en.globes.co.il - on December 6, 2021.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.