In a review published by Bank Leumi (TASE: LUMI) today, head of Leumi Capital Markets Macroeconomic Research Department David Reznik writes that an increase in the number of part-time and low-paid jobs casts a shadow over Israel's positive employment data for July.
Employment in the Israeli economy has reached an all-time record in measures such as low unemployment rate and high workforce participation rate, but this boom also has less positive aspects. For example, July saw a decline in the number of people employed in full-time jobs, alongside an increase of 23,700 people employed in part-time jobs, the largest rise since November 2015, in contrast with the trend in the past few months.
Reznik's analysis shows that the jobs added to the market were mostly in low-paid fields, while employment dropped in high-paid fields.
For example, between the first quarter of 2014 and the second quarter of 2016, 33,800 jobs were added in healthcare and welfare, where the average monthly wage is NIS 7,977. There were also 28,600 new jobs in education, where the average monthly wage is NIS 7,350.
During the same period, 25,100 jobs were added in the retail and wholesale commerce sectors, which have an average monthly wage of NIS 7,803, and 15,200 new jobs in the food and hospitality services sectors, in which wages average only NIS 4,139. On the other hand, according to National Insurance Institute (NII) data, the industrial sector, which has an average monthly wage of NIS 12,544, lost no less than 15,900 jobs since the first quarter of 2014.
"About 50% of the new workers in the period between the first quarter of 2014 and the second quarter of 2016 were employed in commerce, hospitality services and food, healthcare and education," Reznik says, "The average nominal wages in these sectors were lower than the average in the economy by 12%-54%."
Published by Globes [online], Israel business news - www.globes-online.com - on August 29, 2016
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