Israel remains plagued by the global economic crisis even though the Israeli Shekel continues to strengthen against the U.S. Dollar. In April, unemployment rose 3-percent to make the unemployment rate 7.6-percent of the workforce. The total number of Israelis declaring unemployment reached 235,600, although holidays in April probably stymied the loss which will likely skyrocket in May. In an interview with Calcalist, Finance Minister Yuval Steinitz defends the government plan aimed at curbing unemployment and cutting down on foreign labor. Notably, he states:
“The financial plan is meant to fight unemployment is several ways: Indirectly – by putting up NIS 26 billion ($6.63 billion) as collateral for a wide scale solution to the credit crunch; and directly – by reducing foreign labor and encouraging unemployed Israelis to take over jobs usually held by foreign workers. There are over 400,000 foreign workers in Israel – that is an astounding figure considering our size….
Foreign workers do not compete with Israelis in the law, medical or academic professions. They compete in the service industry, with janitors and hotel chambermaids, by undercutting pay. When these jobs are available to Israelis again, their wages will be better as well.
“The Israeli market produces enough jobs; the problem is these jobs are not manned by Israelis. True, they’re not sexy jobs, but we have to reduce the number of foreign workers.”
Moreover, some analysts contend that the GM bankruptcy could significantly affect the Israeli economy. Israeli suppliers of GM parts could see a reduction in sales to the United States and international companies that rely on GM for revenue will also likely be forced to curb trade with their partners.
