Labor minister: State cannot support 500,000 ‘new poor’
The country’s welfare services will be incapable of supporting half a million “new poor” people by August, Labor and Welfare Minister Itzik Shmuli warned on Monday, as unemployed workers return slower than forecasted to the workplace as concerns grow regarding a second wave of coronavirus infections.
“Many citizens, hundreds of thousands, are now reaching the end of their unemployment benefit eligibility and have no assistance,” Shmuli said. “The main problem is for young people whose eligibility period is shorter. 70% are young people under the age of 27.”
According to data published by the National Insurance Institute on Monday, the expiring eligibility of current job-seekers – should they not return to work by August – will leave more than 369,000 unemployed citizens without any benefits, and a further 100,000 with partial or full benefits.
“Our first challenge is to support those Israelis who will be able to keep their heads above water. Many of them have families,” said Shmuli. “[We need] to launch aggressive plans beyond the Finance Ministry’s incentives for employers. This is a ticking time bomb.”
The Finance Ministry’s actions to date – including postponing the start date for benefit eligibility until April 19 – are “not bad but insufficient,” said Shmuli, highlighting differences of opinion between the ministries.
Figures published by the Israeli Employment Service on Monday evening showed that nearly 354,000 Israelis reported returning to work since restrictions on the economy were first eased on April 19. Since then, almost 125,000 new applicants have submitted requests for unemployment benefits.
At the peak of the crisis, more than 1.12 million people – 27.5% of the workforce – had submitted applications for unemployment benefits. Unemployment declined to 23.5% by the end of May, or a total of 960,000 individuals.
NII director-general Meir Spiegler said extending unemployment eligibility until the end of August for all job-seekers would cost the state NIS 3.3 billion.