REPORT: Unemployment in Israel at historic low, consumerism rising

The Taub Center reports prices in Israel are still high and in many industries the productivity is still low, but increased employment rates & higher salaries “have led to an impressive rise in consumption in recent years and to an increase in the standard of living.”

By Ariel Whitman


Employment and salaries have risen and unemployment rates have fallen to a historic low over the past year, according to a new report released by the Taub Center for Social Policy Studies in Israel on Tuesday.

“The increase in employment rates, together with the rise in the average wage, have led to an impressive rise in consumption in recent years and to an increase in the standard of living,” the report said.

Bedouin workers at a new Negev factory – Photo: AP

However, it pointed out that “many industries still suffer from low productivity and wages.” It said per capita growth in Israel is low compared to other countries and that despite the overall improvement in the economy in 2017, “prices in Israel are still among the highest in the OECD countries.”

The report pointed to an impressive increase in the integration of ultra-Orthodox men and women in the workforce. Between 2008 and 2013, the percentage of haredim ages 23 to 30 in the workforce rose by nine points, more than for any other sector, to 73% for haredi women and 36% for haredi men.


Dr. Eitan Regev, who wrote the chapter about employment in the ultra-Orthodox sector, said the findings show that “the most influential factor regarding haredi youth’s employment is the decision to find a job.

“In other words, in today’s job market, those who are interested in finding work will usually find it, but this choice is influenced by haredi youth’s earning capacity, which is usually very low due to the fact that they did not have core studies in high school.

“When choosing between a religious way of life and being supported by stipends, and integration into the job market, the fact that the wages they can earn are low is very significant,” he said.

Gilad Brand, one of the report’s authors, said there was no “one right answer” to the issue of increasing workforce productivity in Israel.

“Productivity is a kind of black box and one of the topics that economists know relatively little about. Economic research suggests that there are several important factors that policymakers should consider, such as improving regulation,” he said.

Refrigerated dairy products, still higher prices in Israel than in Europe – Photo: IsraelandStuff/PP

“According to international indices, Israel has unusual excess regulation and a relatively low volume of trade. Moreover, human capital can improve substantially.”

Meanwhile, global financial services giant Credit Suisse on Tuesday published its economic forecast for the first quarter of 2018, saying it expects Israel’s gross domestic product to continue showing steady growth.


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