A serious and worrying statistic is presented today (Wednesday) by the Taub Center, in its annual report on the incidence of poverty in Israel. Economists at the Taub Institute predict, in a report on the state of the country in the corona 2020, that poverty in Israel will increase by about 8% -14% and inequality will increase by about 1.5% -4%, due to the corona crisis.
Prof. Johnny Gal and Shavit Madhala state in the chapter on the report discussing the field of welfare that the main victims of the crisis are the working families, whose leaders have lost their jobs or whose wages have been harmed, single-parent families and young families. Labor and among about 50% of the Arab sector.Some of the casualties reduced the amount of food or the number of meals for economic reasons following the crisis.
“The crisis has forced the state’s systems to invest considerable financial resources, and indeed we have witnessed a dramatic increase in social spending. It is difficult to know how the crisis will affect the well – being of citizens over time, but it largely depends “The plight of the unemployed and helping them integrate into the labor market in decent jobs,” said Prof. Gal, head of the welfare policy program at the Taub Center.
The Taub Center for Social Policy Research in Israel is an independent and non-partisan research institution that deals with economics and society. The center provides policy makers and the public with research and data on some of the most important issues Israel faces in the fields of education, health, welfare, the labor market and economic policy, in order to influence decision-making processes in Israel and improve the well-being of all residents.
In a report by Prof. Avi Weiss, president of the Taub Center, the center’s economists predict that due to the huge deficit created by the government’s need to fight the crisis and help many sectors, “after the crisis the government will have to reduce its deficits quickly and encourage growth to return to debt.” Before the crisis. “
Prof. Benjamin Bentel, Head of the Economic Policy Program at the Taub Center, stated that “Today our national debt situation is much better than that of many other developed countries and the interest rate environment is very comfortable. At this stage, the Israeli economy is highly trusted in the global capital market.” “The Israeli government and its high credit rating in the international capital markets. However, it must be remembered that improper conduct and incorrect investment of funds can quickly change this situation.”
“Under-execution in plans could hurt the economy’s recovery.” Minister of Finance, Israel Katz
(Photo: Avi Mualem)
The authors of the report emphasize that many budgets allocated to the various areas were not utilized in part. The under-execution in business assistance items such as assistance to industries in crisis, and the fact that the budget for employee retention was not used at all, By the end of November only 40%. This section is intended for long-term purposes and it is hoped that the budget allocated to it will be implemented later. “
The center’s researchers also note that “the overall implementation rate of the economic plan for 2020 for the months of March to November stands at 73% and does not match the calendar. Under-execution in some programs may hurt the economic recovery potential. In the health and civil response section, where implementation is consistent with “This year, there were anomalies in expenditures that focused on meeting the special needs of the medical system at the beginning of the epidemic, some of which may turn out to be ineffective after the fact,” Dr. Levib Shami emphasized.
The data are correct as of the end of November 2020
The authors of the report emphasize that “in an international comparison, the scope of Israel’s support programs – which are mainly a direct budgetary incentive – is quite similar to that of other OECD countries and even higher than some of them. In contrast, the scope of tax payment reporting plans, and especially those involving the provision of guarantees to the business sector, is significantly lower in Israel compared to other countries. This fact weakens the resilience of the business sector and may make it difficult to recover from the crisis. ”
Researchers at the Taub Center, Prof. Gil Epstein, Prof. Avi Weiss and Noam Sonntag explain that the impact on employment during the severe corona crisis was not uniform and was affected by many variables. Gender-wise, at the beginning of the crisis the proportion of women whose employment was harmed was higher than the proportion of men, about 38% of women were unemployed or temporarily absent from work compared to about 30% of men, perhaps because many employed in teaching auxiliary professions were women, or women Many stayed home with the children while the educational institutions closed.
Since June, the trend has reversed and the rate of unemployed and temporarily absent from work was slightly higher among men, but with the imposition of the second closure in September, unemployment rose again among women, and in October it was 3% higher than among men.
When examined by level of education, most of the victims of the crisis, especially during the closure periods, had a low level of education. An examination by age groups reveals that the majority of the victims are young workers and older workers after retirement age, during and between closures. “It is possible that the adults were severely harmed due to their belonging to a risk group, and there is a fear that a significant portion of them will remain outside the labor market permanently, which may reduce the labor force in Israel.”
More women have lost their jobs. Holon Employment Bureau
(Photo: Kobi Cuenx)
The Taub Center also found that the employment crisis hit the ultra-Orthodox sector harder, especially men, with the unemployment rate and absenteeism among them due to the crisis reaching 48% in April, compared with 28% among non-ultra-Orthodox Jewish men, and continued to be high during relief and closure. The second. Among workers in the Arab sector, rates were high at the beginning of the crisis but declined, and since June they have been lower than those of the non-Haredi Jewish population in some months, both among men and women.
While many workers were temporarily absent from work during the closure period, a smaller group of workers remained unemployed even during the relief period. Most of the damage in June 2020 was in the business sector, where the percentage of unemployed of all people who were employed a year earlier (June 2019) reached 14% (compared to 5% of unemployed in June 2019 out of employed in June 2018). A sharp increase was also observed among the self-employed who were no longer working, reaching 11% of all self-employed persons who worked in the previous year (compared with 2% a year earlier). This increase was significant both among full-time and part-time workers.
Between February 2019 and February 2020, the wages of salaried workers in the economy increased by about 3%. With the first closure, there was a decrease in the average real wage, but in April there was an unusual increase. This is because the calculation of the average wage is based on the wages of employed persons who actually worked and therefore it is also affected by changes in the mix of employed workers. Accordingly, the fact that many of the workers who stayed in the Knesset in April earned relatively low wages affected the average wage of those actually employed this month. After April, real wages were declining again, but even in August real wages were still higher than in the months before the crisis. Especially in the business sector.
Poverty will increase. Queue to the restaurant of the Leshuva Association
(Photo: Assaf Kemar)
The crisis is expected to have further implications for the labor market, and one of the main ones is the adoption of remote work practices. A survey of the business situation conducted by the Central Bureau of Statistics (CBS) showed that 16.5% of employers who allowed their employees to work remotely were interested in increasing the employment rate from home. Disabilities: Working from home also reduces traffic congestion and allows flexibility in working hours – which in turn allows for a better balance between work and family. At the same time, a negative impact on working from home was observed – a decrease in employee productivity in some types of business.
Employers and various industries have dealt with the crisis in a variety of ways – through work from home, wage adjustments, and there have also been those who have taken advantage of the crisis for efficiencies that are not directly related to it. In small businesses (5-10 employees) over a fifth of the workers were laid off, in the food and beverage industry about a quarter of the workers were laid off, and in industries that can be more based on long-distance work such as high-tech and finance were laid off or temporarily absent from work. Despite the gaps between industries, the high rate of layoffs is reflected in the economy as a whole, probably due to declining demand, uncertainty and the difficulty of raising capital.
“The employment crisis management policy should be differential, based on the needs of each of the affected groups,” Prof Weiss said. “However, the crisis also brings opportunities, for example low-paid workers who have been laid off can improve their level of training and pay. We are already witnessing a 20% increase in enrollment in higher education institutions this year, and the government can take advantage of the crisis to increase employment rates. “In addition, expanding the use of technology, with an emphasis on technology that enables remote work, facilitates the accessibility of employees to quality employment.”