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The dark side of Israel's economy

Israel’s national lore tends to prefer the image of an economic miracle, where Jewish spunk and pluck made the desert bloom and gave rise to an unbeatable hi-tech industry. The reality, however, reveals a far different picture.

An African asylum seeker cleans the area outside tents for homeless refugees in Levinsky park, south Tel Aviv, December 20, 2012. The Tel Aviv municipality, along with several NGOs, set up two tents as a temporary winter shelter for homeless refugees in the park. (photo: Activestills.org)

A tiny exclusive Tel Aviv chef restaurant posted a warm message of support on Facebook for its beloved Eritrean cook, who is on strike this week. Another trendy Tel Aviv eatery posted a sign asking its customers to understand why it is serving food on disposable plates. According to Israel’s state-run Channel 1 news, on the third day of strikes and protests by African migrantsת who make up much of the back-kitchen restaurant staff and other unpopular jobs, the Israel Farmer’s Federation and employers in the cleaning, food and hotel industries appealed to Interior Minister Gideon Sa’ar to give the migrants supervised work permits rather than expulsion orders. The employers argued that this would prevent a wave of business shutdowns, as nearly the entire African migrant community is participating in the strikes which are slated to continue indefinitely.

This week’s protests of tens of thousands of migrants who have entered the country illegally from Egypt, often through smugglers, raises a host of human rights and humanitarian issues. But it also exposes a dark side of the Israeli economy. For all its boasting about the start-up nation with a hi-tech sector powerful enough to bulldoze through a global economic crisis, the gaps among the country’s richest and poorest citizens have been well-documented. Less documented is the plight of those who reside below the lowest rung of the ladder: the migrants – referred to almost exclusively as “infiltrators” in the Israeli press and official documents.  They do the dirtiest work, in the worst conditions and with the fewest protections or benefits. Their labor is untaxed, undocumented, and undesirable: like legal foreign workers in Israel, they do jobs that few, if any, Israelis want to do.

Israel’s chugging economic engine may rely on its largest export sector, but hi-tech is a relative newcomer to the marketplace. Cheap labor goes much further back.

The majority of the current wave of migrants have been given a temporary permission to be in the country, and cannot be deported to their countries of origin due to risk of persecution. But applications for asylum are either rejected (just 0.25% of the cases reviewed received refugee status) or they are pending – i.e., not reviewed at all, according to a Knesset research report from 2012. According to the Israel Democracy Institute, the government decided in 2011 that Sudanese and Eritrean migrants are not eligible to submit asylum applications. Although officially prohibited from working, many have found employment through human resource companies providing cleaning, food and service sector employment. The government has warned employers of penalties, but has refrained from enforcement until the construction of a holding center planned for their detention is completed.  This is what Interior Minister explained in his interview to Channel 1 on Tuesday evening, but it is precisely the situation described in a government report from late 2010 – three years ago.

That report, published by the Center for Research and Information of the Israeli Knesset pointed out obvious flaws in the plans back then. The new detention center, for example, was slated to hold up to 8,000 people, but by late 2010 there were already over 30,000 such migrants (at present their numbers are estimated to be over 50,000). The authors also noted:

It must be pointed out that due to a lack of government policy on everything related to the population of infiltrators and asylum seekers and the problem of their registration, it can only be assumed that this population will spread geographically, and as a result, there will be a direct influence on the Israeli economy.

The Knesset’s research committee was no sharp soothsayer for having predicted the economic and social complexities associated with a lack of policy. Ten years ago, the Joint Distribution Committee commissioned a report comparing international policies on foreign workers and migrants, who were then categorized as legal and illegal workers (the latter referred primarily to workers who entered the country legally but overstayed their permits). That report was commissioned for a very similar reason: the government had no clear policy or overall strategy for how to treat foreign workers, ensure humane working conditions, address their status and impact on both the economy and society. I know this, because I was the researcher commissioned to write the report.

At that time, the issue of foreign labor filling major industry needs – in construction, agriculture, domestic/nursing jobs, service industries – was somewhat new. Israel had begun bringing in some foreigners from the early 1990s, and the real influx came after 2000, when the Second Intifada broke out. It was then that Israel began hermetic closures of the West Bank and Gaza, which provided the country’s main source of cheap labor since 1967. But the notion of “Arab labor,” a phrase implying cheap and dirty work, feels like it has been around forever (the concept has since been ironically and brilliantly appropriated by the Arab-Israeli satirist Sayed Kashua).

Rush hour at Bethlehem Checkpoint (photo: Porter Speakman, Jr.)

B’Tselem, an Israeli organization that deals with human rights in the occupied territories, observed that before the Oslo accords in 1993, 115,000 Palestinians worked regularly in Israel with permits. By the time the Second Intifada broke out, 110,000 Palestinians were working regularly in Israel. They comprised roughly one-quarter of the entire Palestinian work force, and their work once supported hundreds of thousands Palestinians. The numbers plunged during the first two years of fighting, cutting off all those dependents, and by 2003, rose to roughly 31,000.

Foreigners from China, Nigeria, Romania, Thailand, Philippines and other countries, flooded in, reaching a quarter of a million in the first half of the 2000s and making up 11% of the workforce. The workers were welcomed at such rates that yet another report charged with creating policy on foreign workers, this time by  the Finance Ministry in 2007, noted that: “The employment of non-local workers in Israel is disproportionate by any standard, the rate is double the acceptable levels in the Western world and even more than that when comparing rates of uneducated labor alone.”

The dependency on cheap labor is often overlooked in Israel’s national lore, which prefers the image of an economic miracle, where Jewish spunk and pluck made the desert bloom.

The reality is that Israel’s economic miracle has depended on paying poor wages for unskilled jobs, long before the current wave of desperate migrants and asylum seekers. The practice creates a false economy in which labor gaps are filled by populations Israel ultimately doesn’t want. Unskilled Israelis are hit hard, but still do not want to accept a job under such conditions. Employers have little incentive to take them, since they have far cheaper options. They become addicted to paying low wages in general, a mentality that reigns not only in unskilled industries but which has penetrated deeply into professional fields. Young graduates – starting lawyers, doctors, academics – suffer economic hardship and deep frustration. Work ethics suffer, economic gaps widen. If Israel summarily deports the migrants or enforces the ban on employment, what will happen to agriculture, service sectors, the food industry? What about those posh, cosmopolitan Tel Aviv restaurants and fancy hotels that are so important for Israel’s global image?

The African migrants are just the latest unlucky group to meet Israel’s economic needs, while being unwanted in its society. The battle over whether they are refugees or job seekers is a red herring: even people running for their lives seek the dignity of employment rather than being forced into crime and indigence. Deportation without transformation of labor standards, ethics and economics will probably only set the cycle in motion for the next group of people desperate for a paycheck.

African asylum seekers: We will continue to strike until demands are met
How Israel views Palestinian, African and Jewish refugees

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    1. directrob

      This is a nicely written story about evil, but as far as the dark side the economy of Israel goes I think you only scratched the surface.

      Reply to Comment
    2. Average American

      The same thing is happening in my country USA. Foreign workers do cheap and dirty labor, a long-standing economic role in the tradition of brutal American capitalism, and are despised by those they serve for being dirty and poor. I think a difference between USA and Israel in this matter is Israel despises them beyond cold economics and into religion (since Israel is a religious state, “The Jewish State”, just like its Muslim neighbors are religious states) because the Jewish religion believes all Non-Jews are destined by God to serve The Jews. What do you think?

      Reply to Comment
      • Kolumn9

        There are only two things I know for certain at this point. The first is that ai am not sober. The second is that you are a trolling Jew hater. Have a shitty day.

        Reply to Comment
        • Average American

          Kolumn go fuck yourself.

          Reply to Comment
      • mike panzone

        it would be wrong to say that the jewish religion teaches that everyone has to serve the jews, and certainly all jews don’t believe this…it is just as wrong as saying all muslims are terrorists and advocate killing jews.
        you might be able to argue that the state of israel and its leaders discriminates against non-jews…but you can’t blame all the members of the religion for the actions of israel which, like iran and saudi arabie, needs to become secularized.

        Reply to Comment
      • Average, the US has gone through difficult and prolonged bouts of hating immigrants for their origins, even when entry legal. What I see happening in Israel is a kind of battered protectionist syndrome, where the suicide bombings, prolonged conflict with Gaza, the West Bank, and Lebanon, the Syrian civil war stretching towards a Sunni/Shiite regional conflict, Iran’s anti-Israeli propaganda and material aid of groups avowedly opposed to Israel, and Israel’s proximity to Africa via Egypt have congealed into a xenophobia where one word, “infiltrators” fits all. I don’t think religion at all relevant to feelings against the Africans, although some Israelis probably do find Islam frightening given the surrounding world.

        I really doesn’t help to see Israel as absorbed in some kind of religious hatred based on Torah or other books. What this mass of fear and, yes, disgust does see is not all imagined. The reactions to this outside, however, can be near hysterical and counterproductive to all concerned. Keep in mind that the US and Canada interned their resident Japanese populations in WW II, and I hear the UK did the same, at first, to resident Italians and Germans. The reactions we are seeing are human, not Jewish or religious.

        Reply to Comment
        • Average American

          Greg I respect your opinions and knowledge but it’s difficult to see how it can’t be related to religion when the State defines itself with a religious name The Jewish State. If you mean the State is doing it without it’s citizen’s approval or agreement, that is even more difficult to see. Regarding comparison to neighboring countries, I think the comparison you use fails because the neighbor is not naming their country The Terrorist State of Whatever.

          Reply to Comment
          • Average, the 1947 elite founding Zionists were by and large secular socialist. You can see this in the 1949 Declaration of Independence. “God” does not appear but rather “Rock of Israel,” which was a compromise: the religious could see this as referring to God, but the secular could see it as referring to the land of Israel or Eretz Yisrael if you are an expansionist. One of the stories over the failure of the Constituent Assembly to write a constitution goes that no consensus could be reached over the role of religion in the new State, so the whole constitution was deferred. I think in equal measure Ben Gurion may have liked the freedom of an omnipotent Knesset given he was prominent.

            The Law of Return makes no religious demand on Jews entering Israel. There are road blocks over marrying outside of Judaic Law, so it is not true that the State is strictly secular. Yet Saudi Arabia infuses religion more directly into the State than does Israel.

            It is hard for Judaism as religion to frame itself as a human universal, although some do. This does not mean that gentiles are the servants of Jews, or placed here for Jews, but there is a pronounced tendency to simply not consider the religious life of outsiders as real to God (since, for example, Jesus is not the Messiah, and let’s just not talk about Mohammad). Christians do this too (“I am the only door” in the Gospel of John). Muslims, actually, if they adhere to certain Qur’anic verses, are the most liberal of the three Abrahamic or “Book” faiths. But chopping off heads and suicide bombings seem to imply otherwise.

            Israel is in many ways under siege. The right nationalists like it that way, I think, and the leftists, like those posting pieces on this site, are looking for a way out of that. That’s why I respect them and use up too much space here. You tend to say things, to frame things, which play into the siege mentality. African refugees have broken the siege (infiltrators), one more burden Israel does not need. So “let them go to their families,” etc. But they are not being forced into the humiliations of prisons because they are seen inferior to God’s chosen, nor are the refugees only able to find low end jobs because of that. They’ve become pawns in an ideology of infiltration and institutional conflict between Court and Knesset. Really, inferior before God just isn’t in play. Now, if you are talking about the vanguard settlers of the West Bank…well, that’s another game.

            Reply to Comment
          • Average American

            Thank you Greg.

            Reply to Comment
        • Average American

          My reply to you Greg was apparently not sent by the site’s server. Basically I said I respect your opinions and knowledge, but it’s difficult to see how it’s not related to religion when the State defines itself with a religious name, The Jewish State. Also I said I think your comparison to neighbor countries fails because the neighbors aren’t naming their country The Terrorist State of Whatever.

          Reply to Comment
          • Marcos

            AA, in my Jewish education, observance, and interaction with other Jews, I never have been taught the hatred that you speak of. You mention it more frequently than anyone else I have been exposed to. So tremendous fail on your part. Mores, based on un your anti-social tendencies and limited abilities, I wholly support recognizing you as inferior until you are able to mask such deficiencies. This is not because of your religion; just the fault of your genetics and upbringing.

            Reply to Comment
          • Average American

            Did you say my genetics? Are you serious? Greg, how should I react to this?

            Reply to Comment
      • i am a jew i live in israel.
        not me nor my friends do not believe that who is not jewish should serve us. this a lie. an antisemitic propoganda that you were probably taught as a child by antisemites.
        these people dont belong here, they crossed egypt and payed top dollar to cross egypt because israel is a democracy and will not hurt them and they can work here. this is how economy works all over the world dubai and the amirates were built by slaves from india. lok it up. but no one says nothing about it.because its not interesting since it doesnt involve israel. we are not the trash can of the world and cannot help everyone. we lose millions of dollars on treating wounded people from syria who consider us to be the zionist satan. we do it because we want to help. but we cannot help everyone.stop spreading lies and hate about us. the vast majority of israelis are good honest people! sorry for spelling..

        Reply to Comment
        • Average American

          Okay, I can accept fellow human beings in your general population. But your government is not acting like you are talking. It doesn’t look like your government represents you. Would you say so?

          Reply to Comment
    3. mike panzone

      any foreign workers who come to the united states legally are allowed to bring their spouses. their children are also allowed to come and attend the public schools for free. i hear that in israel, unskilled labor that is brought in from the philipines, thailand, india, etc. are not allowed to do the same. is this true and what is the reasoning for this if it is true?

      Reply to Comment
      • No Mike, those on US work visas aren’t guaranteed entry of a spouse. Even permanent residents with green cards can find year + delays if marrying someone outside of the US. If the spouse has promise of separate employment things can speed up. The whole idea of a temporary work visa is that you are going to go away. Since any child born under US jurisdiction is by constitutional law a citizen, there is even more incentive to deny temporary families work visa entry. Israel may be harsher at times, but not qualitatively so.

        Reply to Comment
    4. “the Israel Farmer’s Federation and employers in the cleaning, food and hotel industries appealed to Interior Minister Gideon Sa’ar to give the migrants supervised work permits rather than expulsion orders. The employers argued that this would prevent a wave of business shutdowns, as nearly the entire African migrant community is participating in the strikes which are slated to continue indefinitely.”

      This happened in South Africa and the Civil Rights US era as well, and I think, off topic, ultimately only similar economic integration can alter the West Bank as well. It is a marvel to see this strike form so quickly, especially so considering their lack of livelihood reserves to subsist through its duration. We have sorely underestimated these people; humanity can still surprise. I hope they can somehow last it out.

      “The battle over whether they are refugees or job seekers is a red herring: even people running for their lives seek the dignity of employment rather than being forced into crime and indigence.”

      Indeed. I think these refugees meet the definition of a scapegoat: if only we remove them things will improve. But they won’t, for the reasons you suggest. Perhaps both the Court and (new) Knesset majority (the second prison vote being 30-15) will begin to see resolving the issue rationally, in law, has immediate and long term advantages. This needs elite shifts, and you report one may be underway now. And such shifts can make a Court stance easier to assume as well.

      Reply to Comment
    5. RK

      And right after the founding of the state there was the collusion with Arab regimes to force the emigration of their Jewish populations to Israel. The Arab regimes needing a scapegoat and the Israeli regime cheap labor.

      Reply to Comment
    6. Noble

      Dahlia, you do good research, it is your interpretations that fail you. Typical rookie mistake of confusing causality with correlation in this case. Your agenda driven attitudes continue to betray you and keep you from creating solid work. Please keep in mins that Israel’s implementation of free market wage structure is no different from that of other nations who prwctice capitalism. So portraying Israel as unique is disingenuous at best.

      Reply to Comment
      • Of course Israel is not unique in its dependence on cheap (sometimes migrant) labor. Establishing this reality and looking at how it fits into, or contrasts with Israel’s self image and specific national narrative is the point of this piece. If that didn’t come across clearly, my sincere apologies.

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