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Ari Sacher

Dwindling Palestinian Labor and How It’s Affecting Israel



Last week, I went with my entire family on a vacation to the Dead Sea. We stayed in a villa in Neve Zohar, about half a mile from the ritzy hotels in Ein Bokek. The villa was huge – we are 28 people, so it had to be large – about 4500 square feet. It had three swimming pools, two of them with a gigantic TV screen, two Jacuzzis, and an outdoor fireplace. It cost a pretty penny, but that’s the only way we can all get together.


The neighborhood consists exclusively of huge villas. Five of them were going up right next to ours. As I was unloading the car, the contractor came over to me and apologized that construction would begin promptly at a quarter to six the next morning. We got to talking, and he told me that every single villa in the neighborhood is being built for short-term rental to large groups of people: family get-togethers, parties, that sort of thing. He is very proud of the villas he is building. They are of the highest standard, he told me. The best marble, the best windows, and his workers are all from China. I asked him where else workers in the construction industry come from. He told me that most of them come from India, Sri Lanka, Moldova, and the Ukraine. But the Chinese are by far the best. They work hard, and they know what they are doing. Of course they come at a premium, he said, but it’s worth it. “What about Palestinian workers?,” I asked him. He gave me a look of disbelief. Since October 7, there are no Palestinian workers in the local construction industry, and that number does not look to be changing significantly at any time in the near future. 


Before October 7, about 100,000 Palestinians from Judea and Samaria came every day to work in Greater Israel. After the massacre, that number was slashed to zero. Not one Palestinian comes to work in Israel. The industry that has suffered the most is the construction industry. About one third of the slack has been taken up by foreign workers. Due to the reduction in labor, the rate of construction in Israel has plummeted. The demand far outweighs the supply. Over the past twenty years, the price of housing here has been increasing exponentially. Governments come and governments go, each with a new plan to reduce the cost of housing, and, inevitably, each one fails. Basic economic theory shows that a reduction in supply combined with an increase in the cost of labor will push the price of housing even higher. According to the Bank of Israel, replacement of Palestinians with imported workers has cost Israelis more than 25 billion shekels. While the government is working to increase the number of foreign workers that come to Israel, the numbers that the government is talking about is less than half of what is required. Meanwhile, the local construction industry is crashing. Beyond the lack of workers, the price of raw materials has skyrocketed, as Turkey has recently imposed a ban on exporting certain construction materials to Israel, including cement, steel, aluminum, and iron. Until October 7, Turkey was Israel’s largest supplier of these materials. The Startup Nation is coming to a standstill.


The Israel Ministry of Defence (IMOD) along with the Israel Defense Force (IDF) are pushing the government to allow Palestinians to enter into Israel. IMOD and IDF are unconcerned with the cost of housing. What does concern them is the cumulative effect of unemployment in Judea and Samaria. According to high ranking officials in IMOD, the fear is that local Palestinians will be reduced to poverty, and the resulting pressure cooker will cause them to turn to terror. IMOD maintains that the Palestinians are reaching the boiling point. The problem is that there is general public unwillingness to allow Palestinians to enter Israel at this moment. An anonymous government official said, “Perhaps one day in the future.” 


But maybe help is on the way. At the end of October, Israeli news Kan 11 reported that the government had approved the entry of 8,000 Palestinian workers into Israel. According to the report, the move was approved by the IDF and by the General Security Service (GSS), better known as the Shabak, Israel’s FBI. Nevertheless, these particular workers would not be working in construction. They would be working in other blue collar industries in which it is notoriously difficult to find Israeli workers. This includes digging graves and working in the hospitality industry. Many hotels have absorbed Northerners who have been evacuated from their homes and one year later remain understaffed. The hope is that if this initiative goes well, then more Palestinians will be granted entry into Israel, and they will be diverted to construction and agriculture. 


Not everyone is pleased that Palestinians are beginning to return. The Police Force objects strongly to the move. Ophir Binder, the representative of the Police Force at the cabinet meeting to approve the move, said, “We in the Police Force believe that this is not the time to allow Palestinians from Judea and Samaria to return to Greater Israel. They are burying their own dead and there is a strong chance that they will enter Israel with the goal of vengeance.” Binder was referring to a persistent IDF crackdown in Judea and Samaria that has taken place since October 7, particularly in the cities of Jenin and Shechem, in which hundreds of Palestinians have been killed while the IDF destroyed rocket factories, arms caches, and terrorist hideouts.


Certain members of the coalition government are also against the move. Orit Struck, the Minister of Settlements and National Missions, who hails from the National Zionist Party, had strong words to say to the Shabak: “They said it was all right to allow Palestinians to enter Israel before October 7 and look how that ended!” She was referring to the fact that before October 7, many Gazans had worked in Israeli communities in the Gaza Envelope. Some of these workers not only actively participated in the massacre, but they also mapped out the towns and the individual houses, reporting back to Hamas as to which windows were usually open, who usually carried a gun, and in which rooms the children slept. Ministers Betzalel Smotrich, Finance Minister and the head of the National Religious Party, and Isaac Wasserloff, the Minister for the Development of the Periphery from the Otzma Yehudit party, joined Struck, stating that at this moment, it is simply unfeasible to allow the entry of any Palestinian into Greater Israel.


A study by Estaban Clore, from the prestigious Institute for National Security Studies (INSS), used statistical methods to understand if there was any correlation between the number of Palestinians who entered Greater Israel from Judea, Samaria, and Gaza, with the number of Israelis killed in acts of terror. The study used data pertaining to the murders of 153 Israelis between January 1, 2007 and October 6, 2023. According to the study, 44 percent of those killed were killed by rocket fire and sniper fire from within Gaza and another 33 percent were killed by Palestinians with Israeli citizenship who live in East Jerusalem, an area that Israel annexed in 1967. This means that 77 percent of those murdered were murdered in acts of terror that would not have been prevented by prohibiting the entry of Palestinian Arabs into Greater Israel. While Clore admits that he cannot be absolutely certain that an act of terror will not be committed by a Palestinian worker, the odds are definitely in his favor.


This encapsulates the problem. It is a sort of “head versus heart.” Logically, the right thing to do is to gradually increase the number of work visas to Palestinians until the construction industry is on more firm economic ground, and the economy in Judea and Samaria returns to equilibrium. The process is tried and true, and the chances for disaster are small. This is what the head would argue. The heart, on the other hand, would vociferously reject the head’s claim. October 7 was a watershed moment. Any trust Israelis had for Palestinians on October 6 was incinerated along with the residents of the Gaza Envelope. Israelis will never go down that path ever again. Even if it is the logical thing to do. Even if it means a spike in housing prices. Even if it means that contractors might lose their livelihood, even if it means that Joe Palestinian will not be able to feed his family, and as a result, might turn violent. What was will no longer be. Security trumps everything else. October 7 showed that if we don’t take care of our own security, then nobody will.


Good things,

Ari Sacher

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