Israel's Job Market Masked by Foreign Workers and Reservist Pay
Translated & summarized from TheMarker by baba
Israel's job market shows low unemployment but a declining employment rate since the war began, with both low- and high-skilled jobs affected. A surge of over 60% in foreign workers and NIS 110 billion in reservist payments are masking these structural problems. The economy functions but faces budgetary costs and productivity risks.
The story in 5 lines · by baba
- Israel's employment rate has fallen since the war began, despite low unemployment.
- Foreign worker numbers have surged by over 60%, masking job market weakness.
- Reservist payments amount to approximately NIS 110 billion, obscuring job market issues.
- Both low-skilled and high-skilled professions are experiencing employment declines.
- The economy functions at a budgetary cost and risks to productivity.
Despite a low unemployment rate of 3% in September, Israel's job market faces structural issues, with the employment rate declining since the start of the war. This decline is led by two segments of the workforce: lower-skilled jobs, where Israeli workers are increasingly being replaced by foreign laborers, and high-skilled professions experiencing a slowdown.
An analysis by Alex Zabezhinsky, chief economist at Meitav, reveals that the apparent strength of the labor market is being obscured by a significant increase in foreign workers, up by over 60%. Additionally, payments to reservists, totaling approximately NIS 110 billion, are masking the underlying weakness. While the economy continues to function, this is occurring at a considerable budgetary cost and with risks to productivity.