"The situation of the labor market in January was more difficult than last October"

The situation of the labor market in January was more difficult than in October, when the second closure ended - both in the rate of job seekers and in the length of the period in which many of them are out of work. This emerges from an analysis of the employment service.
127.7 thousand new job seekers were registered in January - an increase of 56.4% compared to December 2020.

On the other hand, only 18.2 thousand people reported returning to work - the lowest number of returnees since the beginning of the crisis. At the beginning of January, 727.4 thousand jobseekers were registered and at the end of it, 823.6 thousand jobseekers. Throughout the days of the month, 762.9 jobseekers who claimed unemployment registered in the employment service, an increase of 13% compared to December. 93.5 thousand demanded income guarantee, an increase of 5.7% compared to December.
Out of 127.7 thousand job seekers, 96.3 thousand job seekers were registered due to unpaid leave (75.4%), 16.4 thousand people were fired and the rest resigned. Of the 18.2 thousand who reported returning to work, 54% were registered because of unpaid vacation expenses. Meanwhile, 26.8% returned after dismissal.
The number of job seekers does not give the full picture regarding the state of the economy. The Employment Service draws attention to the fact that in January for every return to work, seven jobseekers were registered. In contrast, in September, during the second closure, the ratio was 5.7 new job seekers for every return to work.
The employment service warns that in the current reality, where there are fewer vacancies and there is greater difficulty in finding work, the economy will find it difficult to return to a full routine. "Competition for each position, which is on the rise anyway, is expected to intensify by the end of the eligibility period for June 2021," the service claims. "Unfortunately, this situation will lead to side effects that the economy may suffer, which include the need to extend benefits for another period, an increased transition to alternative subsistence benefits, payment of wages without the issuance of wage slips, and more."
According to the Employment Service, an increase in the underemployment of many groups in the Israeli economy is expected. Therefore, the state must act as quickly as possible to create jobs or encourage the creation of many jobs, along with strengthening investment in human capital.
The data show that if at the beginning of the third closure one could have hoped that his harm would be limited, his effects would have been more severe than expected. The employment service explains this by prolonging the crisis, which has led to its effects on the labor market being more severe than initially forecast.
An analysis of employment service data also shows that although the number of enrollees in the third quarantine service was lower than the second quarantine, many of the second quarantine jobseekers have not yet returned to work - so the number of jobseekers during January 2021 is second only to the number of jobseekers in March and April. The employment service emphasizes that this figure is significant, since many of the job seekers have been out of the labor market for a very long time.
Dr. Gal Zohar, director of the research and policy department at the Employment Service, said that "the policy measures taken in Israel in the past year have focused on artificially preserving the standard of living, through additional payment for unemployment. This is in contrast to the policy measures taken in most OECD countries, which focused on the artificial but temporary preservation of job vacancies.
"The result of the tracks Israel has taken is that most job seekers do not yet feel pressure to return to work. "The benefits of the Israeli policy paradigm may erode quickly."
The picture is gloomier when looking at supply-demand gaps between job seekers and job vacancies. According to the CBS, in January there were about 60.3 thousand job vacancies in the economy, compared with 101.6 thousand in the corresponding period in 2020. Returning to them, we see that for every vacancy published by the CBS, about 14.2 job seekers compete. If one considers the number of jobseekers who are not on forced leave, the ratio drops to 6.5 jobseekers for every vacancy.
For comparison, at the same time last year, only about 1.7 job seekers competed for each vacancy. That is, despite a measured increase in the number of job vacancies in recent months, the ratio of job vacancies to job seekers has deteriorated as the number of job seekers has continued to rise, and so competition for any vacancy among non-job seekers has continued to climb.
Rami Graur, CEO of the Employment Service, said: "In order to shorten the process of returning to work and accelerate the exit from the crisis, we believe that proactive, assertive and broad activity is needed to encourage return to work - especially for those in the IDF." Returning to work and creating greater certainty in the economy, for businesses and job seekers alike.Encouraging and rewarding employers for job creation is also a necessary step.

“We have prepared a large and detailed plan and we are taking a series of steps accordingly, such as collaborating with the manufacturers regarding vocational training, and assisting employers in returning workers who refuse to return from sick leave. We are opening the employment bureaus tomorrow to receive an audience in order to help job seekers return to work soon. "