Israel is facing an unprecedented unemployment crisis, but just how bad is it exactly? The answer to that question varies. In fact, there are three different sets of data, published by the three government bodies which measure unemployment: The Israeli Employment Service, Central Bureau Statistics and the National Insurance Institute; and the data ranges from 480,000 people unemployed all the way to 864,000. Each set of data is based on different measuring models, which take into account different criteria.
In normal times, the criteria for measuring unemployment is of little interest to the general public, but these are not normal times. The government has declared its intention to link its emergency financial aid program to the level of unemployment, with the support set to stop when unemployment returns to levels below 10 percent. This could mean that the duration of much needed government support to depend to a large extent on the model of unemployment measurement.
Define “Unemployed”
As it turns out, the definition for unemployment is not as straightforward as it might sound. Not every person out of work is considered to be unemployed: women on maternity leave, or full time students are out of work, but are not considered to be unemployed. The level of unemployment is calculated as a percentage of the workforce – those who are willing and able to work; and represents the proportion of those people who are actively seeking employment, but have not been able to find any.
This means that unemployment is a subjective term at the best of times, but the coronavirus crisis has complicated matters even further. The employment crisis has been so severe that many Israelis have given up searching for work altogether, essentially removing them from the unemployment data even though they remain out of work.
"So many people out there to compete with"
Limor Shalev-Gayar, 51, is one of those people. Before the coronavirus crisis she was working as a travel agent for Amdocs, and has been unemployed since mid-March.
“Looking for a job today is an extremely difficult experience,” she says, “There are just so many people out there to compete with. For each position I looked at I was competing with people half my age.”
The coronavirus has had the additional effect of turning entire industries obsolete. This was the case for Shalev-Gayar, because a travels coordinator's job is irrelevant now, due to traveling restrictions. “If I want to work, I have to find work in a completely new field. Because I have no experience, I can only apply for entry level jobs, and employers will prefer younger candidates almost by default,” she said.
Shalev-Gayar has not given up her search, but she knows many who have. Those who do eventually give up their search will no longer be counted as part of the workforce, and therefore would not count as unemployed.
The varying data
The Israeli Employment Service has posted the highest estimate, placing the number of unemployed at 840,000, which constitute 21.3 percent of the workforce. The method used by the IES is the most liberal: the number is based solely on reports from the unemployed themselves. In other words, 21.3 percent of Israel’s workforce has reported to have lost their job.
The National Insurance Institute, on the other hand, bases its estimates on eligibility for unemployment benefits. This method would put the figure at 502,530. However, this estimate does not take into account the self employed and those who have lost their eligibility.
The third estimate is the lowest, and is published by the Central Bureau Statistics. This is the estimate that is used in international comparisons, and is based on standardized methodology. However, this estimate places the number of unemployed at 480,500, or 11.5 percent – just above the rate which would end government support, according to Prime Minister Netanyahu.
The government has announced its intention to construct a new, more accurate model of measuring unemployment in the coronavirus crisis, but in the meantime no such model has been developed. This poses a question to policymakers in Israel: can unemployment rates be trusted as an indicator on which to base the end of support?
