Unemployment in Israel has reached a record high of nearly 100,000 jobless, about six percent of the work force, according to figures released today. It is the highest rise since the economic slump of the mid-1960’s, just before the Six-Day War.
Baruch Haklai, Director General of the Employment Service, said theproblem was especially acute in the development towns where the jobless rate is triple the average for the country as a whole.
Yisrael Kesser, Secretary General of Histadrut, blamed the previous Likud-led government for neglecting development towns in order to invest large sums in settlements in the administered territories. “The government does not realize what a time bomb we have in the development towns,” he said.
Prof. Ephraim Kleimann, a Hebrew University economist, said fighting inflation by unemployment was “the easy way out.” He warned that large-scale joblessness would encourage emigration which is contrary to the very reason the State of Israel was founded for.
Kleimann said he was concerned that the economic slowdown will damage the industrial sector of the economy rather than reduce the large workforce in the service area. He proposed shrinking the civil service while easing the tax burden on employers so there will be no need to fire workers.
Commenting on the unemployment figures in a radio interview today, Minister of Labor and Welfare Moshe Katzav said massive unemployment was contrary to the government’s policy. His ministry predicts that while the jobless figure will rise gradually in the immediate future, it will taper off by the end of next year when the economy, hopefully, resumes its growth.
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