Unemployment in June in Israel rose to 9.4% from 3.4% in May, including all the people put on unpaid leave during the operation against Iran, the Central Bureau of Statistics reports. The broadest unemployment rate, which also includes workers who have given up looking for work and those not participating in the labor force and who have been laid off in the past two years was 10.1% in June, up from 4.2% in May. However, the official unemployment figure, not including those on unpaid leave and, was a very low 2.7%.
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Unemployment data for June 2025 reported by the Central Bureau of Statistics show that 294,000 people were “temporarily absent from work all week for economic reasons” – that is, they went on unpaid leave, during the operation against Iran. This is a dramatic jump compared with only 16,000 in May. This is a much bigger figure than the initial Ministry of Finance estimate, which was about 100,000 workers on unpaid leave last month. But the operation against Iran was relatively short, and it is likely that a return to the trend of very low unemployment will already be seen in the July data.
The government’s recently approved wartime compensation plan allows employees to receive unpaid leave, as was done at the beginning of the war in October 2023, and similarly during the Covid pandemic five years ago. Hundreds of thousands of employees took advantage of the opportunity, and according to the approved plan those who did not work for at least 10 days will receive unemployment benefits. Since, according to Central Bureau of Statistics data (which are not complete but based on a sample), the number of employees who took advantage of this is greater than estimated – this could cost billions. The total cost of the compensation plan, including direct compensation to businesses, is expected to cost NIS 4.5 billion, but this amount could be higher.
Published by Globes, Israel business news – en.globes.co.il – on July 21, 2025.
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