Israeli job market under strain as unemployment more than doubles in March

Statistics published this week by Israel’s Employment Service show a sharp rise in job seekers in March, with 396,000 people looking for work – more than double the figure recorded in February. According to the report, there are now roughly ten applicants for every three available jobs, with thousands of people relying on savings, government unemployment benefits, and whatever assistance they can receive from private charities.

Several sectors of the Israeli economy have been severely affected by the war, particularly the tourism and agricultural industries. Extended closures of Ben-Gurion International Airport have led to the loss of hundreds of jobs directly tied to airport operations, while many more have been lost due to the sharp decline in visitor arrivals. This includes bus and taxi drivers, transportation fleet maintenance workers, hotel staff, tour guides, and others in the tourism sector.

The arts and entertainment sectors in Israel have also been hit hard, with IDF Home Front Command guidelines restricting large public gatherings and limiting many sporting events and cultural performances, including plays, concerts, and even movie screenings.

Because a large percentage of Israel’s agricultural production is centered in the Gaza periphery and in the Galilee, the last three years have been a time of tremendous disruption and displacement. This has had an impact beyond employment figures, as prices for fresh produce and other goods in Israeli grocery stores have also risen sharply. Alternative supply routes from neighboring countries have become more expensive, with producers and wholesalers passing on increased costs to consumers.

Women have seen higher unemployment rates than men, with statistics showing that they account for 58.3% of all applicants, although higher rates of unemployment can be seen across the spectrum, affecting all demographic groups and geographic areas.

However, Israeli officials have said that all hope is not lost, noting that an end to active hostilities could lead to a rapid return to normal routines and even an economic rebound, as pent-up consumer demand drives increased spending.

“In total, the report reflects the volatility experienced by the labor market during Operation Roaring Lion, with 396,000 job seekers,” said Employment Service Director General Inbal Mashash. “The primary impact has been on parents, women and young people. At the same time, Israel’s labor market remains resilient, and the data already point to the beginning of a recovery and a gradual return to routine.”

Some sectors of the economy are already in high gear, including manufacturing, with Israel’s “Big 3” defense companies – Rafael, Elbit and Israel Aircraft Industries – all reporting strong demand for their products and services, especially in Europe.

On the other hand, the Finance Ministry has warned it may need to raise taxes to fund the large volume of equipment, vehicles, fuel, weapons, and ammunition ordered by the IDF during the war, both from Israeli suppliers and defense companies in the United States and elsewhere.

The Defense Ministry is expected to be the only government ministry to receive a budget increase, while most other ministries say they will likely be forced to cut public services.

This week, Israeli media outlets reported that Israel’s cost of living is higher than in many European countries, while economists warned that prices for many everyday goods are likely to continue rising, as salaries remain largely stagnant and the labor market tightens.