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Unemployment nears 80% in Gaza as war devastates livelihoods

Unemployment in the Gaza Strip has soared to nearly 80% since Israel launched strikes last October, the United Nations labor agency reported on Friday, highlighting the unprecedented devastation to the Palestinian labor market and the wider economy.

Eight months into the war, the unemployment rate in the Gaza Strip has reached a “staggering” 79.1%, while the West Bank, also severely impacted by the crisis, has seen joblessness hit nearly 32%, according to the International Labour Organization (ILO).

These figures push the average unemployment rate to 50.8% across the occupied Palestinian territory, as per the ILO’s fourth assessment of the war’s impact on employment and livelihoods.

The new data shows “the grim toll the war in the Gaza Strip has taken on human lives, and the desperate humanitarian situation it has caused, are accompanied by widespread devastation of economic activities and livelihoods,” said Ruba Jaradat, ILO Regional Director for Arab States.

“This compounds the suffering of Palestinians in the Gaza Strip and the West Bank and further endangers their safety and wellbeing.”

Jaradat noted that the figures exclude Palestinians who have given up on finding a job. “The situation is much worse,” she emphasized.

Israel’s relentless strikes have killed more than 36,700 people in Gaza, mostly women and children, and injured over 83,530 others, according to local health officials.

The war started after Palestinian resistance group Hamas’s Oct. 7 cross-border attack on Israel, which resulted in the deaths of nearly 1,200 people, according to Israeli figures.

Vast tracts of Gaza lie in ruins amid a crippling blockade of food, clean water and medicine.

Israel is accused of genocide at the International Court of Justice, which recently ordered Tel Aviv to immediately halt its operation in Rafah, where more than 1 million Palestinians had sought refuge before the southern city was invaded on May 6.

Around half of Gaza’s 2.3 million people lived below the poverty line even before the war.

The figures only tell part of the story.

The ILO emphasized that unemployment rates do not account for those who have left the labor force altogether due to unattainable job prospects, suggesting the actual unemployment rate is likely much higher.

“Imagine with this very high level of unemployment, people will not be able to secure food for themselves and their families,” Jaradat said.

“This is also impacting their health … Even if they have money, there are no hospitals that can accommodate the catastrophic situation there.”

In terms of the economy, the real gross domestic product (GDP) has contracted by nearly 33% in the Palestinian territories since the war began.

The ILO estimated a contraction of 83.5% in the Gaza Strip and 22.7% in the West Bank.

“In the occupied Palestinian territory and particularly in the West Bank, the reduction in incomes has pushed many families into severe poverty,” Jaradat said.

The severe economic crisis has particularly impacted the private sector, the backbone of many economies.

Almost all private sector establishments in Gaza have either completely ceased or significantly reduced production, losing 85.8% of their production value – equivalent to $810 million – during the first four months of the war.

In the West Bank, the private sector suffered a 27% reduction in production value, equivalent to $1.5 billion, during the same period, the ILO said.

This translates into daily private-sector production losses of $19 million across the entire occupied territories during the first four months of the conflict.

“Restoring people’s livelihoods and creating decent jobs is vital to enabling Palestinians in the Occupied Palestinian Territory to recover from the horrors the war has inflicted on them,” Jaradat said.

“This recovery work must take place alongside the ongoing humanitarian response and the ILO and its constituents and partners are implementing an Emergency Response Plan to this end,” she added.

The report also offered projections on the impact of the war for the entire year of 2024.

If the war was to end in August and economic and labor market recovery efforts followed, the annual unemployment rate for 2024 is expected to average 47.1%.

Under such a scenario, real GDP would plummet by 16.1% and real per capita income by 18% compared to 2023, marking the most pronounced decline in growth rates for both indicators over two decades.

The war has also severely disrupted supply chain networks and transportation routes in the West Bank due to closures by Israel, movement restrictions and settler attacks.

Among West Bank workers who are still employed, 51% faced reduced hours of work and 62.8% experienced wage reductions, according to a survey by the ILO and the Palestinian General Federation of Trade Unions (PGFTU).

A separate survey by the ILO and the Federation of Palestinian Chambers of Commerce, Industry and Agriculture (FPCCIA) found that 65.3% of West Bank enterprises reported a reduction in their workforce, with many resorting to permanent or temporary layoffs.

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