Minister of Finance Yuval Steinitz appeared before Channel 2 News earlier this week armed with ostensibly impressive figures from the Central Bureau of Statistics that claimed that the unemployment rate had fallen to 5.7% - "the lowest level in decades". With this ammunition, Steinitz tried to defend himself against anticipated attacks about the housing crisis and the high cost of living, by spewing out the usual slogans along the lines of "Just as we solved the unemployment problem, we'll solve the housing problem."
Really? You should hold off before opening that container of cottage cheese to celebrate the solving of Israel's unemployment problem.
Steinitz, along with the media headlines following the Central Bureau of Statistics report, told only part of the unemployment story. The Central Bureau of Statistics report ran for a page and a half, the normal length of monthly data reports. A deeper examination of the numbers - something that Steinitz definitely does not want us to do - requires looking at the quarterly unemployment numbers, which the Central Bureau of Statistics itself says are more reliable. They include some more interesting data.
Less unemployment, more part-time jobs
Page four of the Labor Survey for the first quarter of 2011 includes the figure on involuntary part-time employees - people who cannot find full-time or second jobs. The number of such people rose by 3.4% in the first quarter to 110,000 persons (or 3.7% of the total number of employed). That's right - 110,000 Israelis are involuntarily working only part-time, so that Steinitz could arrive at Channel 2 News to say that he solved the unemployment problem.
The Labor Survey also states that 5.8% of women were involuntary part-time employees. In other words, women seeking full-time jobs, even if they do not cover the cost of daycare or babysitters, cannot find such work.
The private sector, especially the retail sector, is quite generous in providing jobs, but equally parsimonious in paying salaries. Employees, especially women, are required to work six-hour shifts, rather than full-time. If they lack unions, these women are doomed to part-time jobs, which means part-time income.
However, it is the public sector, where Steinitz works, that is especially enamored of part-time work. Health and welfare employees are crying day and night about their work load on one hand, and the lack of positions on the other. And, wonder of wonders, social workers hold one-third, one-quarter, and one-fifth positions. They beg for full-time jobs, but Steinitz's officials ignore them.
Less unemployment, more poor workers
Steinitz has a bitter fate as other figures released this week spoil his party. A study by Prof. Haya Stirer, chairwoman of the Taub Center Social Welfare Policy Program, found that, in the past seven years, the proportion of poor families with a breadwinner rose from 44% to 60% of all poor households. 13.4% of all poor families with breadwinners live below the poverty line, compared with the OECD average of 7%.
Stier states, "One reason for this trend is the deliberate government policy of encouraging poor people to work rather than to live off of public assistance. The objective of this policy was to help people escape poverty, but so far one effect has been to move many families from the idle poor to the working poor, without much change in their standard of living. It is likely that the inducements to work involved too much “stick” (reduction of benefits) and too little “carrot” (improving the compensation from the return to work) and as a result, the program may have saved money for the Treasury but has not made a major impact on poverty levels."
Prof. Yosef Dahan of the Open University says that it is not too difficult to lower unemployment rates if there is a decision to force people to enter the labor market such as through welfare-to-work programs such as the Wisconsin Plan (which the Netanyahu government wants to renew - S.N.). He says that whereas the Israeli labor market was once characterized by a strong workers rights, collective labor contracts, and job security, the current labor market is rife with personal contracts, personnel agencies, and generally damaging employment practices. "This closely resembles the issue of GDP growth, when one asks who ultimately benefits. Here too, it is necessary to ask whether the people entering the labor market can earn a living wage," he says.
Apropos of a living wage, last year, Steinitz opposed the labor contract reached between the Histadrut (General Federation of Labor in Israel) and one of Israel's two largest cleaning agencies, which gave employees 20% more than the minimum wage. Ministry of Finance officials said that that the increased pay would have "broad repercussions" on other sectors, and that cleaners "were an unskilled job that does not require a high school education". In other words, cleaners, mostly women, should say thank you for what employers deign to pay them.
Less unemployment, more despair
The Central Bureau of Statistics defines the civilian labor market as people aged over 15 with jobs or who are actively looking for work for at least the four weeks preceding the Labor Survey. Actively seeking works means relying on the Israel National Employment Service, private job agencies, and independent searching. This definition excludes people who have stopped looking for work - people who want jobs are prepared to work now, but could not find a job within the Central Bureau of Statistics' time frame and despaired of finding a job at all. In other words, people who told the Labor Survey that did not look for work in the preceding four weeks are not included in the civilian labor force.
This means that such people are also not counted in Steinitz's marvelous unemployment figure. Surveys by the Ministry of Industry, Trade and Labor estimate the proportion of despairing people at 2% of the civilian labor force, or 60,000 persons.
Not wanting to work at all
In fact, the employment rate also does not include people who do not want to work at all. For example, people who assert that the Torah is their livelihood; people who receive a stipend not to work and are not included in the Central Bureau of Statistics' definition of the civilian labor force, even if these people are capable of work.
This is like a school deliberately omitting from its statistics that students are expected to fail exams. This makes it possible to come to the TV newsroom with very pretty figures that actually conceal a very dismal reality.
In 1995, the Central Bureau of Statistics changed its criteria for the Labor Survey, thereby rendering any 20-year comparison with contemporary figures meaningless and distorted.
Published by Globes [online], Israel business news - www.globes-online.com - on July 27, 2011
© Copyright of Globes Publisher Itonut (1983) Ltd. 2011