Nearly 80% of Israelis between the ages of 25 and 46 are employed – in contrast to an average of 73.7% among OECD countries, according to a report for 2018 released on Sunday by the Ministry of Industry, Trade and Labor.
"Today, the unemployment rate in Israel stands at around 4%, a very low rate illustrating that unemployment – if not entirely – is 'healthy' unemployment, stemming primarily from people who are transitioning between jobs," the report said.
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Alongside the positive aspects of the report, however, it also indicates that just half of ultra-Orthodox (haredi) men and 38% of women in the Arab sector are employed, while also earning far below the average salary. The employment rate among Ethiopian Israelis is also relatively high at 78% overall (73% for women) – but the average monthly salary is low and stands at around half of the average monthly salary for non-haredi Jewish Israelis.
Meanwhile, although the overwhelming majority of Israelis are employed, their productivity is limited. According to the report, the hourly productivity rate in Israel in 2018 was $35.7 per hour, which is just 74% of the OECD average. This gap has remained steady for the past 17 years without improvement.
The most concerning aspect of the report pertains to Israelis' low aptitude in mathematics, reading-comprehension and problem-solving in a computerized environment. Even among the strongest sector of the population – non-haredi Jews – aptitude in math is below the OECD average. Arab Israelis are at the bottom of the list.
Double the earnings
In terms of job creation, the demand for software programmers, engineers and marketers has seen a considerable spike in the past five years, while the demand for clerical workers, typists and gas station attendants has seen more than a 10% drop. About half of the country's construction workers are from the Arab sector, and in the fields of information and communication technology, which represents a large portion of the Israeli high-tech industry, 92% of those employed are non-haredi Jews. The salaries for these employees are also nearly double the national average monthly salary.
As of 2016, only 0.16% of the national budget is invested in job training and incentives packages used to develop and expand the job market. This figure ranks third from the bottom among OECD countries. In comparison, the OECD average is 0.54%, and Denmark tops the list at 2%.
In response to the report, Industry, Trade and Labor Minister Haim Katz said that his office was "working to close the social gaps and provide the best tools possible to those segments of the population that are more challenged when it comes to finding employment."
