December 12, 2003
1400 small businesses, which comprised 12 percent of all businesses operating in Jerusalem at the beginning of 2003, were closed during the course of the year, according to a report published Sunday by National Trade Union in Jerusalem head Ezra Atiya.
The closing of the 1400 businesses led to the dismissal of 2100 workers. According to Atiya, in 2001 and 2002, an additional 2200 small businesses in Jerusalem were either closed or sold.
According to the report, the highest drop in turnover in Jerusalem businesses, some 12 percent, was in furniture stores and exclusive dining establishments. Mini-markets and gift stores marked a seven percent drop in turnover; toy stores, stationary stores, hair salons, and beauty salons marked a six percent drop in turnover.
Popular restaurants in Jersualem marked a six percent increase in turnover, while pizza parlors, shwarma stands and falafel restaurants marked a four percent rise in turnover; kiosks enjoyed a three percent rise in turnover.
According to the report, 2003 was marked by a significant drop in personal consumption. The drop in wages in the public sector, cuts in the transfer of National Insurance Institute payments, and the higher unemployment rates led to a drop in residents' spending.
The report states that "the economic laws legislated by the government and enacted in the second half of 2003 led to an exacerbation of the recession and hurt businesses in Jerusalem. The implications on commerce in the city were especially noticeable due to the make-up of the population in Jerusalem - families with many children and many people who work in the public sector."
According to National Trade Union in Jerusalem findings, in the final quarter of 2003 suffered financial losses, and are likely to close in 2004. In order to prvent their closure and aid businesses in Jerusalem, Atiya proposes that the government and muncipality aid be offered to all businesses in Jerusalem. He states that the government and municipality reduce property tax for businesses, offer special loan funds with subsidized interest rates, and provide unemployment benefits for the self employed.