Palestinians Contemplate Allowing Some Workers to Return to Israel

About 150,000 Palestinians were banned from working in Israel during the Israel-Hamas war. A proposal is on the table to discuss the reinstatement to bring some back, as Israel’s economy faces labor issues. 

Israel’s socioeconomic cabinet, on Sunday, rejected a plan to allow Palestinian workers from the West Bank to resume work in Israel. This was the first time the proposal was discussed since October 7.

The plan to permit some Palestinian workers faced staunch opposition from the far-right Finance Minister Bezalel Smotrich, who heads the socioeconomic cabinet. Smotrich stated that, aside from Agriculture Minister Avi Dichter, who abstained from the vote, his 15-member cabinet voted against advancing the proposal.

“We can and must advance alternatives that will provide a different solution to the economy,” Smotrich said in a statement, adding, “Whoever killed us when there was no money will kill us also when there is money. The security of the citizens of Israel comes first.”

Representatives from the Israel Defense Forces, the Coordinator of Government Activities in the Territories, and the Shin Bet all reportedly expressed support for allowing West Bank Palestinians to return to work in Israel, while Israel Police delegates reportedly opposed the idea.

Before the war, nearly 25 percent of the West Bank labor workforce generated 17 percent of Palestinian national income through jobs in Israel. This involved about 150 thousand Palestinians working inside Israel and around 25 thousand working in Israeli settlements, generating about three billion dollars a year.

Israel has issued work permits to approximately 18,500 Gazans, according to COGAT, a unit of the Israeli defense ministry responsible for Palestinian civilian affairs.

Israel has imposed a complete closure on the West Bank checkpoints, blocking the entry of Palestinian workers. All Palestinian workers have had their permits revoked, rendering them ineligible to enter Israel for work, depriving families and the Palestinian economy of much-needed revenue.

Israel cites security reasons behind its decision not to allow Palestinian workers into the country.

As a result, the Palestinian economy has suffered since the war started, and the workers are facing financial hardship.

“I have a family to feed, and now I’m unemployed and have not worked in two months,” Muhannad Sharif, a construction worker from Ramallah in the West Bank, told The Media Line.

Sharif, a father of five children, said that the labor market in the Palestinian territories is “terrible,” and even if he finds work, it won’t pay well.

“I’ve worked in construction inside Israel for more than 15 years, and I arranged my life on the income I was getting from my job, but now I can’t enter Israel and look for a job. It’s illegal and dangerous,” said Sharif.

Some workers like Sharif say that even if the ban is lifted, they will wait before going back.

“It pays well. Jobs in Israel pay much higher than in the West Bank. My salary is nearly double what I make in the West Bank. But I’m fearful now to go back from revenge attacks, and sadly it’s us, the workers, who will pay a big price,” said Subhi Najjar.

Najjar used to work in construction in Tel Aviv. He told The Media Line that he made enough money to build a nice home and get married. Ten years later, Najjar has three children, and he’s unemployed.

“If they give us a chance to return to work, I’ll go. The work is much better there, and I get paid almost twice as much,” says Najjar.

Dr. Nasr Abdel Kareem, a professor of finance and economics at the Arab American University in Ramallah, told The Media Line that the workers’ issue is an “economic and security one,” adding that if Israel had to choose, it would pick the security choice.

“This is a historical trade-off and not a new one. But what has changed now is that they [Israelis] are very cautious, but they realize that the future of Israel’s stability is based on making concessions. Netanyahu realizes that the United States is perhaps preparing the conditions for the next political phase, and therefore he will make a recommendation to return some of the workers,” said Abdel Kareem.

Abdul Karim says there is maneuvering within the Israeli government, saying that just because the issue has been postponed and has not been decided upon, “there is no rejection or acceptance; this means that there are internal discussions that have not yet matured.”

He says the scheduled visit by U.S. National Security Advisor Jake Sullivan later in the week may have something to do with the issue of allowing some Palestinian workers back to work, especially in the two most affected sectors, construction and agriculture.

“Netanyahu is under great domestic and American pressure about granting facilities to the Palestinians; the PA economy can’t afford to lose this income to its treasury for much longer,” said Abdul Karim.

“I think there will be partial Israeli action to address the issue of workers and funds,” he adds.

Dr. Alex Coman, a senior financial analyst who teaches at the Academic College of Tel Aviv-Yaffo, told The Media Line the ban has highlighted just how reliant Israel is on Palestinian workers.

“Israel’s economy, particularly construction, and hospitality are completely paralyzed, and the damage to Israel’s economy is significant. But not allowing Palestinian workers to cross inside Israel to work is ‘catastrophic’ to both economies if it is prolonged,” said Coman.

These workers brought back with them between $350 to $500 million per month to the West Bank markets, pumping desperately needed money into the cash-strapped PA treasury.

“These workers don’t have a war chest, savings that could help them to survive long months without income. The situation is painful and bleak for them, and it will have devastating consequences on the Palestinian economy,” said Coman.

Many construction sites around Israel stand idle.

In peacetime, more than 80,000 Palestinian workers with permits cross daily from the West Bank to work in Israel, according to Palestinian officials.

Left without those workers, the construction industry in Israel is operating at 15% of its prewar capacity, according to the Israel Builders Association, an industry group.

Coman explains that the economic hit will be absorbed by Israel, something the PA can’t do,

“When you think about Israel, it has no difficulties getting credit or loans from foreign countries; we have very good credit ratings, or even if it declines, we will always be able to get loans,” said Coman, adding, “small businesses are at risk of collapse. Israeli farmers are desperate for Palestinian labor, and they need them immediately.”