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Why Israel’s young people aren’t going back to work

CM 25/04/2021

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The local coronavirus safety net is working too well for young people, the Employment Service reported Sunday. Despite the nationwide unemployment rate dropping to 8.9% in the second half of March, the percentage of young people returning to work is barely moving, it said in a press release.The unemployment rate throughout the pandemic averaged about 16%.As the economy reopens due to the success of the vaccination campaign, businesses are looking to hire in record numbers. But there is a shortage of people interested in working.Israel had a record 112,500 vacancies available in March, the highest-ever recorded figure, the Central Bureau of Statistics reported last week.People under the age of 34 comprised 47.4% of all unemployed workers in March, the same ratio as in February. This was despite a huge spike in job openings during March in fields where young people are overrepresented, including restaurants, hotels and entertainment industries.That the reopening of those sectors after the third lockdown did not alter the makeup of the employment pool indicates that younger people are not incentivized to return to work, the Employment Service said.The emergency coronavirus legislation enacted last year guaranteed unemployment benefits amounting to about 70% of income through the end of June 2021. Many people have been taking advantage of the situation for an unpaid vacation.

With more than two months until the deadline and no clarity about what benefits will await job-seekers after June 30, the Employment Service wants the Finance Ministry to take a firmer approach to get people back to work.Some restaurant owners told The Jerusalem Post the difficulty in finding workers was hampering their ability to return to normal after nearly a year of diminished activity. Since December, the number of available restaurant jobs has increased by more than 200%, the Employment Service said.“The data confirms what we have argued all along,” Employment Service CEO Rami Graur said. “Extending unemployment benefits has saved hundreds of thousands of job-seekers and employers from collapsing. But with the economy reopening, the safety net has become an employment barrier for quite a few job-seekers, including the young.”“In July, we must move to an effective unemployment benefit model that will encourage a return to work,” he said. “We need a time-limited model, with different benefit rates according to age and family status, and with proper employment evaluations, to get back to the original purpose of the benefits as a safety net for those who need it.”Last week, Finance Minister Israel Katz said due to the rapidly improving economic situation, unemployment benefits would be reduced by 10% after June 12, the day on which benefit payments for May will be made. A comprehensive plan for continuing benefits after June will be published at that time, he said. Source: Jerusalem Post

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