Unemployment rate at 28-year low

Number of jobless Israelis drops to 5.5% in second quarter of 2011. But social groups try to burst bubble, claiming figure does not reflect reality

Gad Lior|Published: 09.04.11 , 07:43

Israel's unemployment rate dropped to 5.5% in the second quarter of 2011, compared to 6% in the first quarter, and is the lowest rate in 28 years.

According to the Central Bureau of Statistics, the number of jobless Israelis fell to 175,000 in the second quarter. At the highest point in recent years, the unemployment rate reached 7.9% in the second quarter of 2009.

Looking for Work

4,000 haredim at employment fair

Meirav Crystal

Industry, Trade and Labor Ministry surprised by overwhelming response to first-of-its-kind Jerusalem conference among ultra-Orthodox public. 'Haredim want to work,' participants stress

4,000 haredim at employment fair

The unemployment data are being published with a certain delay after the economic activity figures, and therefore do not reflect the slowdown in the economic growth recorded in the second quarter.

Nonetheless, there are those who claim that the low unemployment rate is misleading as the employment rate in two specific sectors – haredim and Arabs – is extremely low. If more people in those sectors were looking for work, it would have been difficult to provide new jobs.

While Treasury officials celebrated the surprising data, social organizations rushed to burst their bubble, saying that "this figure does not reflect reality. The unemployment rate may be lower, but there are many more poor workers and people working part-time or earning a minimum wage."

According to the figures, the number of Israeli working in full-time jobs was down 1% compared to the previous quarter (a drop of 20,000 people), while the number of Israelis working part-time (less than 35 hours a week) went up by 7% compared to the previous quarter (an addition of 56,000 people).

According to Dr. Roby Nathanson, director-general of the Macro Center for Political Economics, "There is no room to get excited over figure pointing to a drop in unemployment, because it's simply unrealistic. This figure exists only on paper, while reality is completely different.

"Only about half of the Israeli citizens at the suitable age work. The unemployment rate as presented by the CBS may have dropped, but the labor market has been joined by people working for a minimum wage and party-time," said Nathanson. "On paper they may not be unemployed, but their situation is in fact much worse. They work and they are poor."

According to the National Insurance Institute's poverty report, about 40% of Israelis living under the poverty line are employed.

Nathanson added that the figure pointing to a drop in the unemployment rate does not include two large populations, in which the jobless rate is among the highest in the country – Haredim and Arabs.

"I wouldn't celebrate the drop in unemployment because what we see here is not a real drop in the unemployment levels and people joining the labor market, which enables them to live in dignity," he said.