Share of workers let go nearly doubled in April

The share of new claimants for unemployment benefits who were let go in April was almost twice the rate in March, the Israeli Employment Service reported Sunday. The report sparked fears regarding the return of many furloughed employees to their former workplace.

The majority of new applicants remained employees placed on unpaid leave due to measures to contain the coronavirus outbreak. But the share of workers let go increased from 6.3% in March to 11.8% in April. Many job-seekers on unpaid leave were likely to be let go, the Employment Service predicted.

A total of 177,400 new applicants submitted requests for unemployment benefits in April, compared with more than 850,000 in March. The quantity of new applications in April still remains about seven times greater than monthly applications prior to the crisis in January and February, which were 23,800 and 25,800, respectively.

At the end of April, the Employment Service recorded more than 1.15 million job-seekers, representing 27.6% of the national workforce. In February, the unemployment rate was 3.9%, or 162,500 workers. The unemployment rate is expected to remain in double figures for “several more months,” the Employment Service said.

Following the end of Passover, and the gradual lifting of economic restrictions, a modest flow of employees returning to work has been recorded. According to data published last week, nearly 49,000 citizens have reported returning to work since April 19.

“From the end of April until today, we are seeing a slow return to the workplace,”

Employment Service director-general Rami Garor said.

“We estimate, given the return of educational frameworks in the coming days, that we will see greater movement, especially among those placed on unpaid leave,” he said. “This is the time to encourage employers from a wide range of sectors to bring back their employees from unpaid leave on a wide scale.”

Israel remains at the height of the economic crisis, and additional waves of economic turmoil are expected to “include an increase in the unemployment rate,” Garor said.

Younger workers continue to be hit hardest by the coronavirus outbreak, the Employment Service reported. Workers under 34 represented 47.8% of all new applicants in April, it said. The share of applicants over 55 rose from 14.8% in March to 16.9% in April, it said.

Except for the tourism-dependent resort city of Eilat, the towns and cities with employees most affected by the outbreak are those characterized by high concentrations of haredi (ultra-Orthodox) and Arab populations: Betar Illit, Modi’in Illit, Bnei Brak, Beit Shemesh, Nazareth and Umm el-Fahm.

A decline in the share of applications in April was recorded from employees working in education (9.2%, down from 13.7% in March), sales (7.7%, down from 9.3%) and the dining sector (5.8%, down from 6.3%). The decline was mostly attributed to the expiry of eligibility for unemployment benefits.

Meanwhile, increases were noted among workers in industrial, maintenance and administration professions, suggesting that there has been a delayed impact on those sectors. For example, the industrial manufacturing workforce has relied on a buildup of orders made prior to the coronavirus outbreak.