Employment among Arab and haredi (ultra-Orthodox) men increased significantly during 2023, but this progress halted, and the trend reversed – for Arab men in the second half of 2023, and for haredi men following the outbreak of the Israel-Hamas War – according to a report by the Taub Center for Social Policy Studies in Israel.
In the second quarter of 2024, the employment rates of Arab and haredi men were 74% and 54%, respectively, compared to 87% of non-haredi Jewish men.
The percentage of Arab women working reached its highest-ever level of 46%, the Sunday report said, noting that this is the third year running in which the rate of Arab women working has peaked.
Overall, during the war, the rate of women working was almost unaffected while the rate of Arab and haredi men working dropped, the report said.
“While the findings are promising from a sectoral perspective, the decline in employment among Arabs and haredim is concerning given the well-known challenges these populations face in the labor market,” the report noted.
“Added to this is the intensification of inter-sectoral tensions during the war, particularly regarding the issue of Arab citizens of Israel and the question of equality in bearing the burden [of IDF service].”
Impact of reserve duty on workplace attendance
The report also looked at the impact of reserve duty on workplace attendance, noting that December of 2023 was the time period when reserve duty caused the most absence with some 3.4% of employees drafted. This means that nearly 150,000 workers were drafted at this time.
Looking at the sectors most heavily impacted, the study found that in the infrastructure sector,nearly one in six employees was out for reserve duty, while in management and support and the hi-tech sector, nearly one in ten employees missed work for reserves.
The report also noted that an unprecedented 60,000 women were drafted to reserve duty in the Israel-Hamas war and that women made up 20% of reservists.
“It is important to note that these workers—many of whom are called for additional rounds of service—lose opportunities for professional advancement and development, which can harm their careers and earning potential. Beyond this, absences from work on the scale we have seen have severe effects on the labor market as a whole,” said Prof. Gil Epstein, one of the researchers who compiled the report.
“Considering all this, policymakers must act immediately to minimize the damage to the labor market by increasing long-term investments in this area.”
Between the first half of 2023 and the first half of 2024, the number of jobs in the Israeli market grew by just 33,000 jobs, compared to 165,000 jobs in the same time frame in the two previous years.
The growth of the number of jobs varied by sector, the report added, explaining that in some fields the number of jobs has grown while in others it has dropped.
The sectors that grew included health, welfare, and caretaking, which grew by 34,000 employees in this field and education, which grew by 22,000.
The sectors that shrank the most included food and service which shrank by 19,000 employees, and information and communications (excluding hi-tech) which shrank by 15,000.
The number of employees in the hi-tech sector grew by less than 2,000 compared to growth of 14,000 in the same time period in the two years prior.
The number of those not participating in the labor market because they gave up on finding jobs or who stopped working because they were fired or their workplace closed has grown in comparison to recent years.
Affect on wages
The report also looked at wages, finding that between January and May of 2024, wages for employees were 3% higher than in the same time period in the previous year, and 12% higher than in 2019 in real terms – this after there was near-zero change between 2021 and 2022, and 2022 and 2023.
Looking at sectors separately, there were significant wage decreases for employees in education and health, the report found, adding that there were also wage drops for employees in local and public administration, and security among others.
The highest average wages for employees were in hi-tech, hi-tech industry and finance, the report added. The lowest average wages for employees were in food and services, other services, and entertainment.
Wage inequality remained similar to levels from previous years.
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