Israelis in the Labor Force in Times of Corona

IDI special survey on the economic repercussions of COVID-19: 65% of self-employed are hardest hit by the current crisis; younger workers feeling the impact more than to other age groups; high educational levels moderates economic harm.

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Summary of Major Findings

COVID-19 has dealt and continues to deal a severe blow to the Israeli economy and to so many of Israel’s’ citizens, and is one of the main triggers of the current anti-government protests and demonstrations throughout the country 

The survey presented here aims to provide Israel’s economic decision-makers with an updated and detailed portrayal of the employment and economic situation among both salaried employees and the self-employed, against the backdrop of the corona crisis and government restrictions on economic activity. 

It was initiated, developed, and analyzed by the staff of the Center for Governance and Economy at the Israel Democracy Institute, with the methodological oversight of IDI’s Guttman Center for Public Opinion and Policy Studies. The survey is the second round of a panel study, making it possible to identify and analyze trends in the employment and economic situation of diverse populations in the wake of the Corona crisis, between March-April and July 2020. 

The data are based on the responses of a representative sample of Israelis who were working prior to the onset of the crisis resulting from the corona crisis. 

“Corona-Unemployment”

The survey’s main findings reveal that as of June 2020, 13.5% of salaried employees can be broadly defined as “Corona- unemployed” (5.5% among them are unemployed, and an additional 8% are on forced unpaid leave) – totaling approximately 550,000 individuals. 

Furthermore, about 20% among the self-employed in the survey were forced either to stop working or to close down their businesses, most of them temporarily (14.4%) and others permanently (5.4%). These data reflect a reality in which approximately 100,000 self-employed individuals are currently not working (either temporarily or permanently).

Thus, in total, as of June, there were 650,000 “Corona- unemployed” (laid off, on forced unpaid leave, or self-employed who were not working as a result of the situation, reflecting a 16% rate of unemployment.

To arrive at an estimate of the total number of unemployed as of June 2020, we added the pre- Corona (February 2020) rate of unemployment to the current data. At that time, the unemployment rate was at an historic all-time low – 3.3% (138,000 individuals), according to Central Bureau of Statistics data. Thus, the total rate of unemployment as of June 2020 stood at 19.3% – that is, – 788,000 individuals were unemployed. 

About 82% of salaried employees and a similar percentage of the self-employed (80%) were working in June of this year; however the rate of self-employed working only part time – was more than double the rate among salaried employees (42% and 17% respectively).

Loss of Income

Salaried Workers vs. the Self –Employed 

Corona’s impact on income among the self-employed as measured in June 2020, in comparison with the period before the crisis (January-February 2020), was more severe than among salaried employees: about 65% of the self-employed and 35% of salaried employees, reported that their income was cut back. However, the average rate of loss of income among the self-employed was 44%, in comparison with 26% among salaried employees. 

Younger and Older Workers 

Loss of income among younger workers, ages 18-24 was greater than the average loss of income among the total sample: – 53% as compared with 34%.

Income and Educational Levels

Low income households were harder hit: The percentage reporting loss of income is higher among lower-income populations, as is the case among groups with lower levels of education. , Among salaried employees, 45% with lower levels of education reported income loss; 41% with technological education; and 26% among respondents with an academic education.

Coping with Loss of Income

62% of the respondents reported that they have liquid funds on which they can draw for a specific period of time, compared to 66% who gave this response in the earlier survey. Among them, about 40% replied that they will be able to support themselves with these funds for up to two months; and 60%--for more than two months. Among the ultra-Orthodox , a relatively high proportion report that they have no liquid funds to live on (33%), compared to other Jews (22%). 

Overdraft in bank accounts

The bank accounts of about 37% of salaried employees and 45% of the self-employed are now overdrawn; most of them have been forced into this situation or have increased the deficit as a result of the corona crisis.

Among those not currently working (unemployed, on forced unpaid leave, or self-employed individuals who are not working), the situation is even more grim: 56% are overdrawn in their bank accounts; most of them (47%) have had go into debt or increases the deficit in their account as a result of the corona crisis.

18% took out a loan; the percentage of self-employed who took out a loan (28%) was relatively high compared to salaried employees (16%). Among those who either went into debt or increased their debt in the bank, an even higher percentage (42%) took out a loan, and about 8% of them were forced to use savings for their day-to-day expenses.

The data indicate that the percentage of Arab Israelis with overdrawn accounts is higher than among the Jewish population (58% and 33%, respectively).

More than half of the respondents (53%) believe that it will take up to about a year to return to their pre-Corona financial situation

The survey findings bring to light the severe blow which the Corona crisis has dealt to the Israeli economy, and to so many of Israel’s citizens, highlighting that some groups have been hit harder than others; for example, the self-employed as compared with salaried employees, those with lower levels of education and of income as compared with those with greater resources.