| 10.11.2010 |
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| Main points of the address today by the Deputy Governor of the Bank of Israel, Professor Zvi Eckstein, to the Israel–Sderot Conference on Social Issues |
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| The Deputy Governor of the Bank of Israel, Professor Zvi Eckstein, today addressed the Israel–Sderot Conference on Social Issues, and spoke about the main recommendations submitted to the government by the Committee on Israel's Employment Policy. The Committee proposed government employment targets for the next ten years, which were reflected in the government's decision on the budget. |
| Professor Eckstein stressed that the main task confronting the government's employment policy was to widen the pool of employees and increase their income, mainly among the poorer groups in the population with low work skills. These groups consist largely of ultra-orthodox Jewish men, Arab women, and low-skilled residents of outlying areas. The Committee set both general and specific employment targets, including increasing the rate of employment among ultra-orthodox men from the current 40 percent to 63 percent by 2020, that of Arab women from 23 percent today to 41 percent by 2020, and of the rest of the population from 70 percent currently to 76.4 percent by 2020. This would place Israel among the leading OECD countries in this regard. The Committee also set a special target that focused on young Arabs (aged 20–24 years), of a 65 percent employment rate among young Arab men and 42 percent among young Arab women. |
| The achievement of these targets is expected to increase GDP growth by 0.75 percentage points more than the current growth trends. To reach those goals the Committee recommended a significant organizational change in the Ministry of Industry, Trade and Labor, such that all matters relating to employment dealt with by the Ministry should be brought together within a Labor and Human Capital Division which would be headed by a Commissioner for Labor and Human Capital, who would have executive power to formulate projects for particular groups such as the ultra-orthodox, Arabs, and the disabled. Executive bodies such as the Employment Service, the Professional Training Department, and the Day Care Department would be responsible to the Commissioner, and the enforcement and regulation of all employment issues in Israel would also be the responsibility of the Commissioner. The Committee submitted detailed proposals to improve the effectiveness of the executive bodies and to expand their activities, as well as recommendations that focused on bringing currently unemployed groups in the population into the labor market by such means as promoting day care centers in the Arab sector, removing obstacles preventing the employment of the ultra-orthodox, and establishing One Stop Centers for groups in the population with special needs. |
| The Committee made several other recommendations, including: the country-wide implementation of a labor welfare program based on the Lights to Employment program that operated until recently, with appropriate improvements; the extension of the Earned Income Tax Credit system (EITC, or negative income tax) to the entire population in order to reduce the poverty rate among the employed, and to improve their employment perseverance; and the continuation of the program to reduce the number of foreign workers without permits, thereby increasing the level of employment and of wages of Israelis with similar skill levels. |
| Professor Eckstein gave special emphasis to the great importance of enforcing the labor laws, in particular the minimum wage, as according to the data, 14.2 percent of full-time employees currently earn less than the minimum wage. The Committee also recommended that the number of inspectors be increased and that enforcement be made more rigorous, with the introduction of appropriate measures of effectiveness. |
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