Gaza’s workforce continues to shrink, 43% unemployment in the last quarter of 2020

A sewing workshop in Gaza (2015). Photo by Gisha

April 13, 2021. According to the Palestinian Central Bureau of Statistics (PCBS), Gaza’s unemployment rate stood at 43.1% in the final quarter of 2020 (October-December). While this figure represents a 5.5% drop compared to the unemployment rate in the third quarter of 2020, it cannot necessarily be taken as an indication of an improvement in Gaza’s economic situation, given the continued decrease of the workforce as a whole.

The rate of participation in the workforce is the percentage of individuals of working age from the total population who are employed or that actively sought employment in the three weeks preceding the PCBS survey. In recent years, more and more people are not being included in the workforce participation tally given they had not been employed or looking for work in the recent period. As a result, the percentage of people counted as unemployed drops as well. In other words, while the number of unemployed people in Gaza did in fact drop between the third and fourth quarters of 2020, so too did the number of people counted as part of the workforce (by 9%). A look at the workforce participation rate reveals a drop of 7.2% from the end of 2018 until the end of 2020. Within one year, the total number of employed people in Gaza dropped from nearly 280,000 in the final quarter of 2019 to about 222,000 at the end of 2020 (a 21% drop).

Seasonal labor, which is common in certain sectors, provides another explanation for the decrease in Gaza’s unemployment rate. During the final quarter of the year, there is an increase in jobs available in fishing and farming. This is reflected in the 93% increase in employment in this sector in the final quarter of 2020, compared to the previous quarter. Despite the seasonal spike, at the end of 2020, 10% fewer people worked in fishing and farming than in the last quarter of the previous year.

Among the people employed in Gaza, 39.2% work in the public sector, either for the Palestinian Authority or for the local government in Strip. Many of these workers are employed on a part-time basis and make about 96 ILS (~29 USD) per day on average. The remaining jobs are in the private sector, where workers make an average of only 36.3 ILS (~11 USD) per day; 79% of private sector employees earn less than 1,450 ILS (~440 USD) per month, which is the minimum wage in Gaza. The overall average monthly wage in Gaza is 682 ILS (~207 USD), compared to 1,062 ILS (~323 USD) in the West Bank.

The unemployment rate among women in Gaza also dropped from 65% in the third quarter of 2020 to 60.4% in the fourth. The gap between women’s unemployment in Gaza and the West Bank (27.4%) remains significant. In keeping with the general trend, the number of employed women in Gaza dropped between the third and fourth quarters of the year, as did their participation in the workforce. At the beginning of 2020, 18.7% of the women living in Gaza participated in the workforce. By the end of the year, the rate dropped to just 12.4%. Youth unemployment (among people under the age of 30) in the Strip stood at 65.5% at the end of 2020, a 3.6% drop compared to the previous quarter and 4.2% drop compared to the same quarter in 2019.

The “coronavirus closure” Israel has imposed at Erez Crossing for more than a year, on top of restrictions on movement of people and goods that have been in place for years, stopped what little traffic of traders, business people and laborers that was allowed by Israel prior to the pandemic outbreak. The double lockdown at Erez Crossing, and the steps taken by the authorities in Gaza to curb the spread of the pandemic, continue to hinder the economy in Gaza and undermine living conditions for its two million residents.