Introduction
“Before the war, I worked in Jerusalem, earning 7,000 shekels per month. My employer treated me fairly and paid on time. He even asked me to come back to work, but I refused because it’s dangerous to enter Israel without a permit. Today, if I manage to find work [in the West Bank], it’s not permanent. They pay about 80 shekels per day, and I support my entire family – my wife, four children, and my mother and aunt who live with us. We only buy basic necessities. One day we can prepare dinner, the next day we can’t. Recently, the school called, requesting payments for the children. I sent proof that I’m unemployed so that they could continue their education. I want to return to work, but I don’t know if it will be possible.”
M.S., resident of Bethlehem District, November 2, 2024
Following Hamas’s heinous attack on October 7, 2023, Israel imposed a complete ban on the entry of approximately 115,000 Palestinian workers from the West Bank who held permits to work in Israel for Israeli employers. Initially, all permits to work in Israel were suspended, but reportedly after a number of days, a very small number – about 8,000 permits – were reinstated, mainly in manufacturing and industrial jobs¹.1 The decision to prohibit the entry of Palestinian workers has extremely severe consequences: More than 100,000 workers lost their livelihoods. In many cases, large extended families relied on the salaries of those who could access work in Israel; following the decision to ban them from working in Israel, they have been propelled into financial crisis.
In the immediate aftermath of the attacks of October 7 and given the chaotic security situation, the decision to suspend the entry of Palestinian workers from the West Bank can be seen as reasonable. However, after several weeks – let alone after more than a year – there is no logic in prohibiting Palestinian workers who have long been employed in Israel from returning to their jobs.
Beyond the harm to Palestinian workers, their families and the Palestinian economy more broadly, the block on entry of Palestinian workers has harmed the Israeli economy, which suffers from a shortage of skilled and experienced Palestinian workers.
The Israeli security establishment has noted that the ban on Palestinians’ access to work in Israel does not stem from justifiable security reasons; on the contrary, rising unemployment in the West Bank may pose security risks. Moreover, the lack of a coherent security rationale is evident from the fact that Palestinians can still be employed in Israeli settlements in the West Bank. According to various reports, of approximately 48,000 permits to work in the settlements before the war, Israel has allowed about 32,000 Palestinians to return to their jobs. These figures show that a different approach to work permits for Palestinians is possible, given political will, and even from the perspective of security considerations alone, in a manner that would not cause such severe harm to so many families.
Israel has created an irrational, discriminatory policy that unnecessarily harms hundreds of thousands of West Bank residents and is harmful to both Palestinian and Israeli societies. At present, the ban is causing short- and long-term economic and social damage, and ignoring hard data proving its lack of rationale and the positions of professional bodies opposed to it, as reviewed in the following position paper.
Background
Revenue from employment in Israel has been a central pillar of the Palestinian economy. A report by the Institute for National Security Studies (INSS) noted that in 2022, income from work in Israel and the settlements constituted about 20 percent of the Palestinian Gross Domestic Product (GDP). According to the report, Palestinian workers brought more than four billion dollars into the Palestinian economy, while the Palestinian Authority’s total annual budget that year was about six billion dollars. The daily wage of a construction worker in Israel on the eve of the war was about 300 shekels, more than double the median wage of workers in the West Bank, which stands at about 115 shekels per day.
The Palestinian Central Bureau of Statistics (PCBS) reported that in 2022, 22.5 percent of employed West Bank residents worked in Israel or the settlements. Of this group, a significant majority was employed in Israel. The scale of Palestinian employment in Israel and the settlements demonstrates the limitations of the Palestinian economy, and especially its almost complete dependence on Israel since Israel’s occupation of the West Bank began in 1967. Palestinian workers have experienced poor to egregious labor conditions and exploitation at the hands of Israeli employers. Employers pay insufficient insurance and pension payments, at rates lower than actual wages. Palestinians are employed in a country in which they are not citizens and where they can, at any moment, perceived as a danger to the public.
Israel has required that Palestinians obtain permits to enter Israel and access work since 1991. According to the then-new regulations, Palestinians could only pass through newly established checkpoints into Israel if they held permits. The criteria for receiving such a permit varied according to government decisions, including related to the worker’s personal status. In the latest available “Status of authorizations for entry of Palestinians into Israel,” a document published by the Coordinator of Government Activities in the Territories (COGAT) regarding the updated criteria established by Israel for Palestinian travel, from May 29, 2023, the quotas and conditions under which Palestinian movement from the West Bank to Israel for work purposes would be considered were: Married men over the age of 22 (and single men over 27), with allocations by profession, the most prominent of which were construction (80,000), industry and services (about 12,000); and seasonally, agricultural workers (12,500). In addition, a quota was set for allocating up to 26,000 trader permits, which were often used by the people who held them to enter Israel for the purpose of finding work.
In addition to workers holding official permits to enter Israel, approximately 40,000 workers entered Israel before October 7 without permits through known breaches in the fence, with the Israeli army usually turning a blind eye. Following a Freedom of Information request submitted by Shomrim, the Israeli police revealed that between October 7, 2023 and December 2024, about 15,000 “illegal resident” cases were opened. Yet, these attempts at enforcing restrictions on entry and presence in Israel have not prevented an estimated tens of thousands of Palestinians from continuing to try to enter Israel from the West Bank for work, even without permits, given their difficult financial situation.
Work permits are not granted according to the needs of Palestinians, but rather, according to needs in Israel. Until the First Intifada broke out in 1987, Israel managed a free trade and tax zone in all areas under its control, on both sides of the Green Line. When Palestinian workers were given free access to the Israeli labor market, about one-third of the Palestinian workforce was employed within Israel proper. The integration of Palestinian labor was one-sided, into the Israeli market, and in doing so Israel deliberately prevented, or at least delayed, the development of an independent Palestinian economy that is not completely reliant on Israel and its decisions.
As mentioned, the salaries of West Bank Palestinian residents working in the West Bank are significantly lower than those of workers in Israel. The Paris Protocols of 1994, governing the economic relations between the then-nascent Palestinian Authority and Israel, and which were intended to serve as an interim agreement for a period of up to five years, sometimes provide a framework (at Israel’s discretion) for these relations. They perpetuate dependence on Israel at both the macro and micro levels of Palestinian economic life – from interest rates to places of employment – both because of Israel’s control over Palestinians’ freedom of movement, including what and who can enter and exit, and because Israel is the most significant source of jobs.
Current situation and implications
West Bank
“The situation in the West Bank is very bad. Everything is expensive. People have no money at all, some don’t send their children to school. Those who rent are being evicted from their homes. Many couples have divorced. Almost everyone is suffering from the crisis and their situation has deteriorated. People no longer buy clothes for events, hardly ever leave the house. The mood is bad all the time, you can’t even go out to a café. The difficulties lead to crises and conflicts within the family. There has been an increased phenomenon of theft of sheep, food, cars, etc.”
G.A., Hebron resident, October 15, 2024
Following the Israeli government’s decision to ban entry to Israel for the vast majority of Palestinian workers who held permits to work in Israel, there has been a drastic decrease in employment among West Bank residents overall. According to the Palestinian Institute for Economic Policy Research (Arabic), in the second quarter of 2023, some 160,000 Palestinians were employed by Israelis, mostly in Israel and a minority of them in Israeli settlements, constituting 18.4 percent of the West Bank workforce. By contrast, in the second quarter of 2024, this number sharply declined to about 27,300, constituting only four percent of West Bank workers. Consequently, the unemployment rate in the West Bank rose significantly following the war – at the end of September 2023, the unemployment rate stood at 12.9 percent, compared to 30.7 percent at the end of September 2024.
Kav LaOved, which aims to protect workers’ rights, reports that prolonged unemployment in the West Bank is breaking up families who cannot withstand the burden of scarcity and uncertainty. It prevents young people from accessing education given the inability to finance tuition and shackles thousands to loans, leading inevitably to heavy debt. Additionally, conversations with West Bank residents reveal that economic distress is causing families to sell vital assets and tap into savings. Some even reported an increase in theft where they live.
In a review of the issue of Palestinian workers in Israel published in August 2024, the Forum for Regional Thinking cites media reports in Arabic about rising unemployment and the ensuing risks and personal costs. The article highlights the apprehension of some to return to work in Israel in the future, despite the financial motivation or even desperation to do so, given the trauma of severe and ongoing violence against Palestinians. The publication notes that workers reported longer delays than usual at checkpoints, repeated arrests en route to work, and greater exposure to racist remarks than before. “Once we worked inside Israel’s territory as if everything was fine,” Mazen Abu Jash, 42, from Beit Dajan, is quoted as saying, “but after what happened in Gaza, Israel is completely merciless, and there is no chance we will return to work there.”
Devastation of the Palestinian economy
In June 2024, the International Labour Organization reported that the unemployment rate in the West Bank had soared to 32 percent, and GDP shrank by 22.7 percent. As part of the report, a survey was conducted to examine the impact of the dramatic decrease in employment in Israel, alongside movement restrictions, settler attacks, and military raids on employers, employees, and supply chains in the West Bank. The survey found that 51 percent of employed individuals experienced a reduction in their work hours, and approximately 63 percent of workers experienced wage reductions. An additional survey found that about 65 percent of enterprises in the West Bank had to cut their workforce, including layoffs or putting workers on unpaid leave.
A World Bank report from September 2024 confirmed the dramatic decline of the Palestinian economy since October 7. Although the World Bank quotes from official Palestinian sources saying that an estimated 33,000 workers had returned to work for Israeli employers in Israel and in the settlements, these numbers clearly remain significantly lower than in the past.
In their distress, many workers exercised their right to withdraw all the pension funds they had accumulated. In exchange, workers who decided to do this were forced by Israel to give up their work permits.² From the state’s response (Hebrew) to a Freedom of Information Act request by Kav LaOved, it appears that more than 50 percent of Palestinian workers who held permits before October 7 chose to withdraw their pensions, and consequently lost their ability to work in Israel. Ma’an director Assaf Adiv told Calcalist, “Today I received a worker who has been working in Israel for 30 years and asked for help. He was forced to arrange termination of employment and withdraw money from his pension, otherwise he has nothing to live on.”
The General Federation of Palestinian Workers’ Unions summarized (Arabic) the situation as follows: The prohibition on working in construction, agriculture, industry, and service sectors in Israel since October 7, which caused a dramatic rise in unemployment, also led to a monthly loss of about 1.25 billion shekels to the Palestinian economy. The Palestinian economy lost approximately 306,000 job opportunities, while 42 percent of private employers in the West Bank had to reduce their workforce.
Israel
“My workers used to stay overnight in Israel. Every Sunday, I would pick them up from the checkpoint and every Thursday, I would take them back. The productivity was good, costs were lower, they were independent and loyal to the business. Due to the situation, I had to pass on many projects in the past year, no longer taking on large or complex projects. In the past, that was my expertise. Forty-five percent of my turnover has been erased. I tried to replace them with Israeli workers but it’s not worthwhile, both because of the costs and because of the skill level.”
Interview with an Israeli construction contractor, resident of Netanya, December 30, 2024
As stated, the decision to ban Palestinians’ access to work in Israel also impacts the Israeli economy. Already in March of 2024, against the backdrop of the shortage of workers and emerging crisis in the Israeli construction sector, the Bank of Israel published a study that called for the return of Palestinian workers to the sector, who “together constituted, until the war, about a third and a half of those employed in the construction and agriculture sectors, respectively.” The report stated that the Israeli government tried to bring in foreign workers for these sectors, with only partial success, and had so far rejected proposals to restore Palestinian labor. The Bank of Israel recommended encouraging employment of Israeli citizens in the construction sector, but given the decision to employ non-Israeli workers, it recommended combining employment of both Palestinian workers and foreign workers from third countries.
Prominent voices in the Israeli government supported this position from a security perspective as well. Former Defense Minister Yoav Gallant said in December 2023: “My firm position is that we must allow workers to exit for work in Israel. A good economy and well-being among Palestinian residents of Judea and Samaria [the West Bank] is an Israeli security interest, no less. Therefore, it is right to let them go to work, support their families, and reduce the pressure.” Later, in March 2024, Interior Minister Moshe Arbel also called on Prime Minister Netanyahu to return Palestinian workers from the West Bank to their jobs in Israel. According to him, preventing the entry of workers meant that construction sites in Israel were inundated with individuals without work permits, a situation far more dangerous than controlled employment.
On May 15, 2024, the government made a series of decisions in response to the dire need for workers in Israel. Among other things, it approved quotas for tens of thousands of additional foreign workers, nearly doubling the number to about 330,000. Additionally, a committee of directors-general of various government ministries “for the matter of foreign workers” was established, headed by the Prime Minister’s Office director-general, and with the participation of the directors-general of the Population and Immigration Authority, Ministry of Labor, Ministry of Foreign Affairs, Ministry of Justice, the Deputy Attorney General, and the Budget Commissioner in the Ministry of Finance. The word “Palestinians” does not appear in the text of the decision even once.
In a position paper (Hebrew) from July 2024, Kav LaOved warned that a government decision expanding the definition of “foreign worker” to include Palestinian workers who are not Israeli citizens carries negative implications, which have not been sufficiently discussed in the appropriate fora and with the required transparency. The decision effectively allows the government to bring in foreign workers at the expense of Palestinian workers. Ma’an also responded that in addition to the increased risk of human trafficking, the harm to Palestinian workers is enormous, stating that the Israeli economy has no alternative to employing Palestinians.
The Israel Builders Association also sharply criticized the government’s decision to bring in foreign workers to fill the vacuum created by the shortage of Palestinian workers. In response to a conference initiated by the National Labor Federation and the Association of Foreign Labor Corporations for the Construction Industry, held in May 2024 with the participation of government ministers and senior officials, a representative of the Builders Association said, “What is the celebration for? The construction and infrastructure sector is collapsing, the economy has already lost billions of shekels, households of 250,000 Israeli workers in the sector are at risk of economic crisis… The rate of arrival of foreign workers to Israel stands at less than 1,000 per week.”
In a discussion of the Knesset’s Special Committee for Foreign Workers, held a few days after the government’s decision of May 15 mentioned above, regarding granting permits to tens of thousands of foreign workers, the committee chairman, Member of Knesset Eli Revivo, appealed to the government and prime minister, demanding they establish a policy regarding the employment of Palestinian workers in light of a situation where their work is allowed in settlements, and tens of thousands of Palestinians, according to MK Revivo, are employed in Israel illegally. He estimated that as a result of the shortage of workers since the beginning of the hostilities, Israel suffers monthly losses at the scale of 3.1 billion shekels to the construction, agriculture, and industry sectors.
In another committee discussion on the subject, Eran Siv, chairman of the Renovation Contractors Association, reported that about 15,000 Palestinian workers were employed in his sector with permits before October 7. Private contractors, members of the Israel Builders Association, attended the discussion, seeking to reinstate employment of Palestinians who had worked for them for many years. They testified before the committee that workers from abroad arrived in much lower numbers than needed, and did not meet professional standards. Additionally, the INSS published a well-founded call to have Palestinian workers return to work in Israel as early as February 2024.
In a report broadcast on Channel 12 News in August 2024, the Palestinian affairs correspondent Ohad Hemo presented an estimate from the Ministry of Finance whereby blocking the entry of Palestinian workers had led to economic losses in the order of 25 billion shekels. In his report, Hemo featured employers who were desperate for the dedicated, professional workers with whom they had maintained long-term working relationships, and details numerous projects (including private, infrastructure, state-level, and local projects) that came to a halt or were significantly delayed due to the acute shortage in working hands. In response to the claim that the ban on the entry of Palestinian workers is based on security grounds, the report mentions that the Israeli security establishment published data according to which “less than one percent of attacks and attempted attacks in the last decade were carried out by Palestinians with permits to enter Israel.”
Following this, an INSS study published on June 5, 2024, stated that “It is clear that until October 7, the entry of permit holders to Israel did not pose a security threat. There are no signs that there has been a substantial change in the behavior of Palestinians living in Palestinian Authority territories in the West Bank. Therefore, a reconsideration of the government’s policy is recommended.”
In various discussions, the fact that employment of Palestinian workers in Israeli settlements had not decreased as dramatically as their employment in Israel repeatedly emerged. In a meeting of the Judea and Samaria [West Bank] Affairs subcommittee of the Knesset’s Foreign Affairs and Defense Committee, held in September 2024, Moran Hadad, head of the Civil Coordination Branch in the Civil Administration, reported that about 48,000 permits were allocated for work in settlements before the war, and at the time of the discussion, there were about 32,000 active permits. This decrease is far less significant than the drop in the rate of employment of Palestinians in Israel.
“The advantages were that turnover was low. Those who left, brought their replacement and taught them. I worked with several family members, I had 20 quotas that were full over several years. The workers started their day at first light. After the war, in the first months, I tried to replace Palestinian workers with Israeli workers, but it only succeeded very partially. Problems arose with contractors who were regular suppliers. I canceled work agreements and stopped bidding for tenders. If the quota is restored, it will significantly help the business, and I will again expand my business.”
Interview with an Israeli labor contractor, resident of Rosh Ha’ayin, December 18, 2024
Conclusion and call to action
“I worked for 20 years in flower greenhouses in the Netanya area, earning 7,000 shekels a month. My employer respected my rights; there was no exploitation. Now I’m not working. I have no alternative sources of income. I sold my car. I struggle to pay bills and buy food and clothes for my children. My 19-year-old daughter’s tuition is paid by her uncle, who lives in Dubai.”
A.S., resident of Tulkarm, October 9, 2024
For decades, mutual dependence was forged between central sectors of the Israeli economy and the Palestinian economy through the employment of tens of thousands of Palestinians in Israel. Contrary to the opinions of professional bodies, a hasty and unsubstantiated decision to prevent Palestinian workers’ access to jobs in Israel is causing severe hardship among hundreds of thousands of residents and harming the Palestinian economy. This is in addition to substantial losses in key sectors in Israel, including state projects. Despite repeated calls and expert assessments, the declared position of security officials, and reports from professional bodies, both local and international, the situation continues, and its impact deepens.
As long as Israel controls the West Bank, it bears responsibility for the right of Palestinian residents to earn a living and live with dignity. Given the difficult situation that has been created, partly as a result of Israeli policy, the least Israel can do under these circumstances is to allow workers to be employed in Israel. According to Israeli experts, there is no justification for continuation of this reality. Workers should also receive the insurance and employment protections due to every worker, fair employment conditions, and proper accommodation arrangements when necessary, corresponding with respect for their basic rights. This is the appropriate, rational policy change that should be implemented immediately.
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¹In parallel, in the days following October 7, 2023, Israel cancelled the permits of some 18,500 Palestinians from Gaza and has not reinstated them. Several thousand workers were in Israel when the permits were cancelled, thus rendering them “illegally present” and giving grounds to the Israeli authorities to detain them under difficult conditions. This paper focuses on the situation for workers from the West Bank. See here to read more about workers from Gaza.
²In practice, the work permits that had been valid prior to October 7 were not cancelled, but entry to Israel was denied. Individuals who wish to obtain their pension funds early have to forfeit their permits, meaning that if Israel removes the ban on entry, they will need to re-apply for the permit, with all that entails in terms of competition with tens of thousands of others and the prospect that their request will be denied.