Coronavirus closures hitting the self-employed hardest - report
When a similar survey was conducted in June, around 80% of self-employed respondents were working, half of which were working only part-time.
By ZEV STUBIsraelis are seen walking along the Jaffa Street light rail tracks in the rain amid the coronavirus lockdown, on January 19, 2021.(photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
Israel’s self-employed workers have fared much worse than salaried employees during the coronavirus crisis, and the situation has continued to deteriorate since the summer, a new study by the Israel Democracy Institute found.The report is based on data from 150 self-employed workers compiled during the second week of December, before the third lockdown, which began at the end of December and was followed by more stringent restrictions starting in the second week of January.At that time, about 74% of the self-employed were working, with most (45%) reporting part-time work and just 24% working at pre-corona levels. In contrast, 87% of salaried employees said they were working at the time, with 68% working at the same level as before the crisis.When a similar survey was conducted in June, around 80% of self-employed respondents were working, half of whom were working only part-time.About 75% of self-employed workers reported a decline in income in November, including 18% who said they had no income at all from their business. That was worse than in June, when 65% said they suffered a decline in income, with 13% receiving no income at all. The average reported decline in November income was 47%, compared with 44% for June.“The results show that self-employed workers have much less financial security than salaried workers,” said Daphna Aviram-Nitzan, director of the Governance and the Economy at the Israel Democracy Institute. “While salaried workers have a degree of job stability, there is a need for Bituach Leumi to offer a greater economic safety net to help the self-employed get through crises like this.”A significant problem was that many small businesses were unable to open at all. The average self-employed business was closed for about seven months between March and December, with 30% closed for eight months and 26% closed for nine months, the report said.“We intentionally conducted the survey during a time when there wasn’t a lockdown, when it was ‘business as usual’ under the pandemic routine,” Aviram-Nitzan noted. “Obviously, things have been much worse at different points during the year.”Since the summer, the number of self-employed workers who were forced to close their business has increased. In June, some 20% of self-employed respondents reported having to stop working or close their business, equivalent to some 100,000 workers in total. In December, that number ballooned to 26%, reflecting a total of around 130,000 self-employed Israelis now out of work temporarily or permanently.Regarding government aid, the report identified three kinds of assistance that had been offered to self-employed workers:
– Grants provided on the basis of the drop in personal income (safety net grants) – a bi-monthly payment of up to NIS 15,000 for two months. Of these, 48% of those surveyed applied, and 91% received the grant.– Grants toward covering fixed expenses that self-employed workers were required to pay regardless of activity. Some 45% applied for these, and 78% of applications were approved.– Full or partial exemption from municipal tax payments. Only 6% applied for these, with the majority accepted.Total “safety net” grants to self-employed workers or controlling shareholders since the beginning of the pandemic averaged NIS 21,875, not including the general grants paid to all Israeli citizens. This reflected 36% of the average personal income from the worker’s business.Most people who applied received their grants within 7.7 days, with a third getting the money on the same day. Just about 12% needed to hire a professional to help them complete the grant applications.Some 50% of self-employed respondents said the process of getting grants was “simple” or “very simple,” while 25% reported that it was “complicated” or “very complicated,” and 25% gave a neutral response.“We were happy to find that the system is working well,” Aviram-Nitzan said. “Most people got their money quickly, without requiring any outside help to apply. That shows that the government learned the lessons from the earlier stages of the crisis.”
