Netanyahu does not admit it, but it is a fact: the economy needs the Palestinian workers

Since the outbreak of the war, the government has closed the gates to Palestinian workers, but has not presented a plan to replace them with foreign workers ■ Meanwhile, those who pay the price are the farmers, restaurateurs, industrialists and contractors, who have lost a significant percentage of their manpower ■ "If 75% of the fruits remain on the trees, it means bankruptcy. We will not stand it"

By Nathaniel Gamss

The article was published by The Marker in Hebrew Jan. 17. 2024. English translation by MAAN

 

After months of uncertainty, Prime Minister Benjamin Netanyahu provided a hint on Saturday (13.1) regarding the issue of Palestinian workers entering Israel. He was asked about the issue in a statement to the media and replied that the question of the entry of the Palestinians is complex in view of the security concerns, but perhaps he said “there is a solution to this in partial steps, such as a pilot that will be conducted in isolated places under proper security. It is very possible that we will go that way.”

The government has refused to allow workers from Judea and Samaria (West Bank) to work in Israel since the outbreak of the war, except for a few thousand who were excluded, but on the other hand, it has not presented a plan to fill their place with foreign workers. There are frantic attempts to fill the gap with foreign workers but they do not tickle the acute shortage created in the economy.

There were several government decisions to increase quotas of foreign workers, but it is not possible to replace in a short time 110 thousand Palestinians who entered Israel legally, and another considerable number who worked in Israel illegally. In addition, the government did not present a plan to replace the Palestinians.

So far it seemed that, as in many cases, Netanyahu decided not to decide. This, in an attempt to avoid a clash with the members of the coalition and with the popular base, who flank him on the right. The deadly attack that took place in Ra’anana on Monday (15.1) gave a boost to those opposed to the return of Palestinians to work in Israel, including the Minister of Finance, Bezalel Smotrich, who wrote on Twitter: “The opposition we led in the cabinet to the return of tens of thousands of Arab workers from the Jewish State to work prevents future attacks. We don’t bring the danger into the house and we won’t give in to external pressure or to weakness and blindness from within.”

The perpetrators of the attack on Monday in Ra’anana were relatives from the village of Bnei Naim in the Hebron area, who were in Israel without a permit. The terrorists were transferred to the Shin Bet investigation, which stated that they had not previously been convicted of security offenses, but were defined as “banned from entering Israel” due to the fact that they had entered Israel without a permit numerous time. One of the terrorists worked at a car wash in the city last month.

Before the outbreak of the war, about 40,000 Palestinians worked illegally in Israel – this is according to an analysis by Dr. Hagi Etkes, formerly responsible for relations with the Palestinian economy at the Bank of Israel, of the data of the Palestinian Authority. His numbers were published in “Globes” (article by Idan Aretz 26.4.23). Over the years, the state turned a blind eye to the entry of illegal Palestinian residents, although it was well aware of the loopholes in the fence through which they entered. Employing foreign workers without a permit, including Palestinians, is a criminal offense whose punishment is expected to be a financial fine and even imprisonment, but the issue is not enforced in a sufficiently deterrent manner among employers who have illegally employed Palestinians.

The issue of the entry of Palestinian workers comes up for discussion quite a bit in the special committee for foreign workers in the Knesset, where you can also hear domestic criticism of Netanyahu. Thus, in a discussion held at the end of December, the chairman of the committee, Eli Revivo (Likud) said that the government must take a decision regarding the Palestinian workers. According to him, as long as there is no decision, employers will continue to wait for the return of the Palestinians instead of moving to hire foreign workers. MK Revivo said: “I am a proud part of the coalition, but I express my displeasure, we do not have the privilege of dragging our feet on any subject – and certainly not on this subject. I met the Prime Minister in person. He asked me for a position paper on the issue of the Palestinians and received it. I know he didn’t reject him, but he’s not a single player. Although he has extensive powers, he is a team player and there are other coalition partners (who are opposed to the entry of Palestinians; NB). Unfortunately, the issue is not progressing. Our duty is to criticize. I am above any political or internal party consideration.”

In another discussion, held last week, Revivo said that there is an understanding that there is no escape from a graduated income for Palestinians to work in Israel. Most of the security bodies say that this is possible given the approval of the political echelon, and the National Security Council have already prepared an outline for a graduated and controlled income for Palestinians.

Kav Laoved Workers’ rights organization recently estimated that 150,000 families in the West Bank do not make a living due to the closure of the territories, because some workers do not support only their nuclear family. This means that hundreds of thousands of Palestinians are affected by the inability to work in Israel. The fact that such a large number of Palestinians cannot make a living in Israel could have devastating consequences for the economy in the Palestinian Authority, and indirectly also exacerbate the security situation. The overwhelming assessment of the Israeli security bodies is that the entry of Palestinians into Israel helps the economy and the stability of the regime in the Palestinian Authority – something that is a distinct security interest of Israel.

But behind the security reasons hides a simple truth: Israelis do not want to work in manual labor such as construction and agriculture, and the Israeli economy actually depends on the Palestinian workforce. Thus, just yesterday (16.1) it was announced that the grant program to encourage the employment of Israelis in the construction and agriculture industries, which was launched following the acute shortage of workers during the war, yielded a meagre crop of 773 Israelis who applied for the program, including 682 in agriculture and only 91 in construction. The economy’s addiction to Palestinian workers will continue for the foreseeable future, as long as there is no comprehensive plan to replace them with foreign workers, and the interdependence between the two conflicting nations will continue.

Thus, while fruitless discussions are held in the Knesset, and while members of the Knesset are competing with each other with belligerent statements that the Palestinians will no longer enter Israel, there are those who live in the real world – and suffer greatly from the situation. The salaries of the members of the Knesset continue to come in as usual, but the ground has been dropped from under the feet of farmers, restaurateurs, industrialists and contractors, who have lost a significant percentage of their workforce at once.

Looking out for workers

According to an estimate made by the Chief Economist Division of the Treasury, the damage to the output of the construction, industry and agriculture sectors as a result of the absence of the Palestinians crosses the threshold of NIS 3 billion per month in the short term. As this damage accumulates, it will have an impact not only on the business owners who depend on the Palestinians – but also on the entire Israeli economy.

Zvi Dror, CEO and owner of Arco Inbar Industries, lost about half of his workforce at once. He employed 20 Palestinians from Jenin before the war broke out, and now he has to manage without them. “We receive fewer orders to reduce the load. Those who order relatively small orders no longer receive service. It is difficult for us to commit in the absence of personnel, so this means that we are reducing our income,” he explains.

Arco Amber manufactures polyester cabinets that insulate electrical, communication and irrigation infrastructures, and is located in Kibbutz Hamadia near Beit Shean. Dror says that the Palestinian workers are calling to ask for compensation, but he does not want to fire them, because it would be a very complex procedure to take on other Palestinian workers in the future, as far as this is possible at all. He managed to scrape a few workers in the meantime, among them the residents of Umm al-Fahm and ultra-Orthodox from Tiberias and Yavniel.

In response to the question of whether this does not threaten the company’s resilience, Dror says that although Arco Inbar will earn less, it is in good shape and free of debt. When I tell him that Netanyahu mentioned the possibility of piloting the return of the Palestinians, Dror immediately says: “If there’s one person I don’t believe in – it’s Netanyahu. I don’t believe a word he says.”

According to an estimate by the Economist’s Division, the absence of Palestinian workers from the industry sector will result in a NIS 300 million monthly damage to the GDP in the short term.

1.6  billion shekels on the trees

Even in the open spaces, outside the factories, the situation is not simple in the absence of the Palestinians. There is currently NIS 1.6 billion worth of fruit on the trees. The big question is how much will be picked and how much money will be left on the tree,” says Daniel Klosky, an owner of Citrus orchards from Emek Hefer and secretary of the citrus growers organization.

According to him, during the citrus season, around November to April, about 8,000 Palestinians were routinely employed – some legally and some not – compared to about 3,500 outside the picking season, in addition to Israelis and Thais. Right now, he says, 75% of the manpower is missing, at the height of the citrus growing season. The volunteers do help, but they come much less recently, and even so the picking is now at a more professional stage, which ordinary volunteers cannot answer. “If 75% of the fruits remain on the trees, it means bankruptcy for farmers. We have no chance of standing up to that,” says Klusky.

According to the Chief Economist Division, the Palestinian workers make up 12% of the 74,000 Agricultural workers in Israel. According to an estimate made by the department, the absence of Palestinian workers from the industry will in the short-term result in a NIS 430 million monthly damage to the GDP. Kloski has a farm of 600 dunams, and he grows all types of citrus. He is currently working with nine Thais who remained in Israel, and promoted what he could when dozens of volunteers came to him every day. Today he lacks about 30 employees.

“We are in the orange season, and people are reluctant to volunteer and work in the mud,” he says. In addition to this, the economy returned to a kind of routine, and the volunteers returned to work or to the study benches after the academic school year opened.

“I need workers, I don’t care where, but October 7th definitely gave us a strong slap in the face” says Klosky. Not all Palestinians are terrorists, but one is enough to destroy everything. In terms of personal security, I currently prefer anyone else to Palestinian workers, but I just want to pick the oranges.”

Let them sue, I’m going bankrupt in a minute anyway”

Yossi Shabbi, a skeleton contractor, employed 8 Palestinians before the outbreak of the war – and now he is left empty-handed. He had a successful business that froze in one day. There was plenty of work, and the workers came daily from Qalqilia and Bidya. “My financial situation is deteriorating day by day since they don’t come in, I don’t work at all. Checks started bouncing, and I can’t pay back the mortgage and other loans,” he says.

Shabbi, the father of three daughters, lives in the Magdiel neighbourhood in Hod Hasharon. He tries with all his might to recruit replacement workers, but comes up with no results. I tried to bring in Chinese workers, but they want NIS 1,500 a day, and even then, they don’t want to work. I’m begging, but the Israelis don’t want to work like that” he testifies.

Meanwhile, there are no new projects, and customers who were in the middle of renovations are putting pressure on him to finish the work and even threatening to sue him. I told them they could sue if they wanted, anyway I’m going bankrupt in a minute, he says..I’m begging for workers – but there aren’t any. If it continues like this, I’ll sell my house. I’m in a bad situation.”

The renovation industry is particularly vulnerable to the absence of the Palestinians, and Shabbi is far from the only one in the field that has reached this situation. “Many contractors are on the verge of financial collapse. I receive inquiries from people who cry to me and say that they have not been making a living for three months and are unable to survive,” says Eran Siev, chairman of the Association of Renovation Contractors.

According to Siev, before the outbreak of the war, 10,000 licensed Palestinian workers were employed in the renovation industry, and another 5,000 who entered illegally. These are teams of workers who were employed by the contractors for many years, got to know them well and specialized according to the requirements of each contractor, explains Siev, and now the contractors are left without working hands. “The role of the state is to find solutions to this situation, but instead they turn their backs on us. They did not even include our industry in the incentive program for work in industries that have suffered from a severe shortage of workers since the outbreak of the war. We are treated like second class. We want Israeli workers, and if not – So foreigners work, but they go to the construction professions and are not directed to us. If there are no Israeli workers, and there are no foreigners – then the immediate solution is only Palestinian workers.”

Looking ahead, Siev says that the renovation contractors are the ones who should be entrusted with repairing the destruction in the towns and Kibutzim near the Gaza border, but those who build on us are dreaming. We are hanging between heaven and earth and don’t know when it will end. We have never been in a situation like this.”

50%  of the construction sites are disabled

According to the Population and Immigration Authority, the construction industry employed 80,000 Palestinians before the outbreak of the war. Raul Srugo, president of the Contractors Association, says that 35 thousand Palestinians who were illegally employed should be added to this. This means an acute shortage of about 120,000 workers, and shutting down 50% of the construction sites.

According to an estimate by the Economist Division, the absence of Palestinian workers will in the short-term result in a NIS 2.4 billion hit to the monthly GDP of the construction industry. This is one of the biggest crises the state has known in the industry. If the state decides that there are no more Palestinian workers, then let it be known explicitly. And if there is an intention to bring them back – then why not now? Why harm the economy? asks Srugo. The prime minister needs to decide. In the meantime, the damage is enormous. There is a decrease in construction starts and delays in the delivery of apartments, projects are taking longer, and infrastructure development is also being damaged. New roads and schools will not be opened. The government needs to decide where it is going, and quickly. When we don’t work, the state brings in less money “.

Srugo adds that “We need the Palestinians, but we must not depend on them. We need to change the mix so that there are more foreign workers here, but this is not something that the state knows how to do quickly. In order to get the industry out of the crisis, we must also be allowed to bring in more foreign workers, in the model of BTB) Business-to-Business)”.

Restaurateur Ilan Zigdon, chairman of the Southern Restaurateurs’ Forum, testified at a hearing in the Knesset that two of his three restaurants are closed due to a lack of kitchen workers. Israelis don’t want to work in these jobs. I’m willing to pay any amount and can’t find workers. There is an irrational shortage in the industry, and it is collapsing. I asked the manager of one of the restaurants to help, and she told me, ‘I run a restaurant, I don’t wash dishes.'”

In a discussion held on Monday this week in the finance committee, Zigdon added: “I can’t open my restaurants, I have no employees, my managers are on reserve, and I don’t see how I can open them this month and next month. There are dozens more businesses like mine that haven’t opened yet.”

 

 

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