Foreign Workers in Israel (or how a country became addicted to cheap foreign labor) Presented by Eliahu Ben Moshe

The Israeli context Young, fast growing, immigration country Rapid economic development and socio-economic structural changes Political changes in the context of the Israeli-Palestinian conflict

Demography Population size: 7.3 million 3.5 million Jewish immigrants, the last million arrived in last 15 years (mainly from Eastern Europe) Multi ethnic composition: 20% Arab-Palestinians, 80% Jews (55% from Europe, 45% from Asia & Africa) Population growth ~ 2% per year High fertility: TFR = 2.9 births per woman Low mortality: exp of life 78.5/88.2; IMR 4.0/1,000 Young population: 37% under 20, 10% over 65

Economy (in 2007) (Modest) high-income economy: per capita GDP 26,000$ US ppp (WB, 2007) Rapid economic growth ~ 5% per year Low unemployment rate < 7% BUT – low LF participation rate < 57% (15+) – high proportion working part time (26%) Stratified Labor market: Arabs and Non-European Jews highly concentrated in low skill occupations High proportions of foreign workers > 8% of LF

Chronology of addiction to cheap foreign labor The case of Israel

First entrance of Non-citizen Palestinian Workers (PW) from administered territories PW became 6% of the work force reaching 100,000+ (7%) by 1987 PW numbers reduced following 1st civil uprising PW numbers halved following 2nd civil uprising 1 million Jewish immigrants during

First entrance of Foreign Workers (FW) with permits First entrance of Non-citizen Palestinian Workers (PW) from administered territories PW became 6% of the work force reaching 100,000+ (7%) by 1989 PW numbers reduced following 1st civil uprising PW numbers halved following 2nd civil uprising 1 million Jewish immigrants during

Undocumented migration > 50% of foreign workers First entrance of Foreign Workers (FW) with permits Permanent FW community: ~ 100,000 persons (inc. families with children) Undocumented FW numbers reduced but still ~ 50% of total FW Average annual number of FW with permits: 95,000 1 million Jewish immigrants during

1 million Jewish immigrants during

Factors involved in the process Structural SEC change - movement from welfare state to workfare state (neo-liberal) economy, combined with strong interests to reduce labor costs Political change: Oslo agreement and the separation from the Palestinians combined with Palestinians civil uprisings (Intifada’s) One million Immigration wave creating a strong increase in housing demand

Economic Consequences It is claimed that they contribute positively to economic growth and, indirectly, to general welfare, but at a price: Negative effect on wages in the lowest rank of the labor market Negative effect on employment rates of locals, especially in above-mentioned jobs All that increases economic and social inequality among Israelis

Social Consequences A new community developed: – Extremely heterogenic (many countries of origin) – An Invisible social group without legal rights and representation in the public and political spheres, that is victim of exploitation by unscrupulous employers – It already is a social problem that might grow larger in the future

Some possible lessons Political factors both internally and internationally seem to play a decisive role in he process Once initiated it is extremely hard to stop it: the economy becomes dependent on cheap foreign labor, Undocumented migration seems to be an integral part of the labor force migration process An important number of FW will remain permanently in the country, forming new social group/s that have the potential to create important social problems

Many thanks for your attention