The fact that the economy has returned to a state of full employment is consistent with the growing shortage of workers in the economy.
According to CBS data updated until May, the shortage of workers is sweeping - both the shortage of professional workers in the technological fields and especially high-tech, which currently constitute about 16% of all vacancies in the economy, and the shortage of workers in sales, restaurants and cleaning, nursing care, Construction workers, security guards and drivers (who make up more than a third of all vacancies) - areas characterized by relatively low wages.
Against the background of the crisis in the high-tech industry in the last two months, which is a correction to the jump in the value of companies in the corona period, the shortage of professional workers in the field has probably eased slightly, but the problem of shortage of workers in the core and technological fields.
This shortage of professional and non-professional workers is a barrier to economic growth, as businesses are forced to give up orders in the absence of manpower to perform the required work.
The result is that on the one hand the economy loses growth opportunities due to the shortage of workers, and on the other hand there is pressure to raise wages and improve conditions on the part of workers.
Apparently this is a "trouble of the rich" - an economy with rapid growth and full employment is facing a shortage of workers.
But the wheel can turn, as we see these days in the high-tech industry, and the responsibility to address the shortage of workers rests with the government.
So what can the government do?
The government must accelerate the scope of training of workers for the required fields in the economy, in cooperation and coordination with employers and participation in the training costs, in accordance with the effectiveness of the placement in each field.
Government intervention in vocational training is accepted worldwide, with the understanding that there is a market failure in the field, when the return for the entire economy from vocational training is high compared to the return on investment of the individual employer.
We emphasize that the government must participate and support effective training, with an emphasis on the areas that reward high-wage workers with high placement rates.
At the same time, the government must continue to work to encourage the integration of workers outside the labor force to join the labor market.
These are mainly Arab women and ultra-Orthodox men, whose participation rate in the labor force is relatively low, but not only.
Another challenge that employers face in Israel and around the world is the phenomenon of workers who worked up to the Corona in low-wage jobs (especially in areas shut down during closures, such as shop assistants, waiters, cooks, hotel workers, airport workers and more) who do not want to return to these jobs.
Changing this preference is not a simple challenge for employers around the world, and the solution to this can be a significant wage increase in order to attract employees.
However, not all businesses can absorb sharp wage increases and remain profitable, especially in the traditional industries, where the wage component is a major component of their costs.
Another solution is the adoption of technology that will replace the employees who have left and are not ready to return - but even this solution may not be suitable for all businesses, and in those since this requires the availability of employees with the appropriate skill to implement the innovative technologies.
In this context, too, the state can encourage and assist businesses that have difficulty absorbing employees, adopt advanced technologies that will replace part of the workforce and enable businesses to become more efficient and improve profitability.
But, as mentioned (and probably also for our luck), not every job has a digital or technological substitute.
The author is the director of the Center for Government and Economics at the Israel Democracy Institute
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