The Ministry of Industry, Trade and Labor is preparing for the rise in unemployment: The worrying unemployment figures which reached a three month high last month may yet be surpassed.
Calclist reporter Miki Peled reported Thursday that the ministry is preparing itself for a scenario where the economic slowdown leads the unemployment rate to increase to 9% of the workforce compared to 7.2% last June.
This means that the number of unemployed in Israel will reach 320,000 people compared to 259,000 people in June, numbers which have not been witnessed since the beginning of the economic crisis at the end of 2009.
With this in mind, the director general of the Prime Minister\’s Office summoned government ministry director generals to his office for a meeting at the end of the month to discuss the possible slowdown and recession scenarios. And next Wednesday the Knesset will convene for a special recess plenum to discuss the situation in the labor market.
Israel Employment Services Director General Boaz Hirsch admitted Wednesday that "the situation wasn\’t simple," and told Ynet that in light of the recent data stating that many of the newly unemployed are 25-34-year-olds from the high-tech sector, the employment service is monitoring the situation with a great deal of concern.
The Ministry of Industry, Trade and Labor is formulating a plan to deal with the matter but even they admit: "The market is heading in a negative direction and the trend is fixed."
Hirsch noted that "Statistically, from the middle of 2009 to November 2011 there was a two year decrease in the number of registered unemployed. In November 2011 the situation changed and there was an increase in the number of job seekers. That is an 0.4 increase every month."
Over the past few weeks, Ministry of Industry, Trade and Labor Director General Sharon Kedmi worked on preparing operative and efficient action plans to deal with the gorwing recession in the market.
"If they give us the budget, we have the tools and we know how to implement them within a few days," Kedmi stated but warned: "If we don\’t succeed in generating growth, we\’ll be taking a step backwards. There is nothing to do, it\’s either here or there, there is no standing in the same place."
Kedmi says he was not surprised by the negative employment rates: We foresaw the trend…The market is heading for a negative direction, that\’s a set trend and we need to constantly be aware of (any changes)."
Yet there are no assurances that the plan will receive the necessary budget. "Obviously we need to maintain a debt-product ratio and not exceed the deficit target, nevertheless, the government is allowed to change its priorities and allocate resources to promote growth," Kedmi added.
Supply fails to meet demand
One of the programs that need a boost is the professional training program which presents interested parties with thousands of professional courses which are subsidized by the ministry at external educational institutions.
"The applicants also undergo occupational counseling after which they decide what to study. 75% of those who apply were placed in a new position, the majority of which placed in their selected profession and they also managed to increase their salaries from their previous positions," said Hirsch.
"By encouraging both supply and demand we are actually contributing to preserving existing places while rescuing manufactories that have met with difficulties," Kedmi explained. "We are an export economy, 80% of out product stems from international trade," he added.
At the moment, the budgeting for the plans fails to meet with the demand: "We advertised a course that was supposed to assist manufactories. It currently has a NIS 25 million ($6.2 million) budget but requests for aid have already gone beyond the NIS 100 million ($24.8 million) mark.
"Similarly, the budget for fund to encourage marketing abroad currently stands at NIS 30 million ($7.45 million), but demand has already reached 10 times the existing budget."