‘63% of furloughed staff confident of return to work’
Unionized employees, higher earners feel more secure
Only 63% of workers placed on unpaid leave due to the coronavirus outbreak are confident that they will return to their former jobs, according to a new economic survey.
The study published by Israel Democracy Institute researchers on Sunday showed that confidence regarding job security was higher among both unionized and highly-paid employees.
Some 77% of unionized workers expressed confidence that they would return to work in May, including 40% who were very confident. Among non-unionized workers, however, the figure was 60%, including 23% who expressed great confidence.
Higher earners were also more positive regarding a return to work, with 52.5% of employees earning “far more than average wage” (NIS 10,500) confident of returning to their former positions, compared to about 22% among those earning less than minimum wage.
Since the start of March, almost 955,000 Israelis have applied for unemployment benefits, bringing the unemployment rate to 26.25%. Of the new applicants, 88.5% have been placed on unpaid leave and 7% have been made redundant.
“The longer the shutdown lasts, the less likely the tools provided so far by the government will be enough to help businesses survive and incentivize companies, who have not yet returned to full activity, to rehire employees,” said Prof. Karnit Flug, vice-president of research at the Israel Democracy Institute and former Governor of the Bank of Israel, who conducted the study with Daphna Aviram-Nitzan and Yarden Keidar.
“With the uncertainty about the future remaining high, employers should be encouraged to gradually return to work the salaried employees who have been furloughed. This should be done through partial wage subsidies to employers who bring their employees back from their unpaid leave, as has been done in some European countries.”
The survey also showed that approximately 58% of employees continued to work as of early April, mostly fulltime (47%). A further 37% were placed on vacation – the majority (30%) on unpaid leave.
Here too, significant gaps were identified between unionized and non-unionized workers. The share of non-unionized employees on unpaid leave stood at 36%, more than double the 17% of unionized workers in a similar situation.
The proportion of full-time employees continuing to work full-time is also higher among unionized workers (54%) than non-unionized employees (45%). Redundancies were only recorded among non-unionized workers.
Among self-employed workers, considered the hardest-hit by the impact of the coronavirus outbreak, only 40% were continuing to work fully or partially ahead of the Passover holiday. The other 60% said they had stopped working or closed their business, the majority (53%) on a temporary basis.
The vast majority of self-employed workers (90%) said they expect a decrease in income during March and April, including 43% who do not expect any income at all.
“The coronavirus pandemic, and the ensuing economic crisis, have exposed the gaps in job security and stability that characterize the Israeli employment market,” said Aviram-Nitzan.
“The gap is between 3.8 million salaried employees, who enjoy some degrees of a safety net in the form of unemployment benefits and unpaid vacation leave, and about half a million workers who are self-employed and small businesses who are more vulnerable.”
Approximately one-quarter of respondents said they do not possess sufficient cash reserves to sustain themselves without withdrawing funds from their savings, while 66% said they have enough cash to support themselves for varying lengths of time.
Among those reporting personal liquidity, 18% said they have sufficient cash to sustain themselves for under one month. At the other end of the spectrum, 16% reported sufficient funds to live for over six months without using their savings.
About one-third (34%) of households said they were in overdraft prior to the coronavirus outbreak. A total of 37% of respondents, who started the crisis with a surplus in their bank account, said the current situation lasting beyond the Passover holiday will require them to draw on their overdraft.
While respondents gave the government an average score of 3.2 out of 5 in addressing the health challenges posed by the epidemic and 2.5 in dealing with economic challenges, self-employed workers gave the government an average score of 2.1 for tackling the economic challenges.
Some 43% gave the government 1 out of 5, the lowest score possible. The survey, the researchers add, was conducted before maximum grants offered to self-employed workers were increased to NIS 10,500.