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

Employment rates 15-64, 2005, Source: OECD and ICBS

0 10 20 30 40 50 60 70 80 90

IcelandSwitzerland

DenmarkNorway

New ZealandSweden

United KingdomCanada

AustraliaUnited States

NetherlandsJ apan

AustriaFinland

PortugalIrelandBrazil

SloveniaGermany

Czech RepublicSpainKorea

LuxembourgFrance

BelgiumGreeceMexicoIsrael

Slovak RepublicItaly

HungaryPolandTurkey

OECD totalEU 15 total

Chronology of addiction to cheap foreign labor

The case of Israel

Graph 1: Non-citizen Palestinians from administered territories working in Israel, annual averages, 1970-2007, thousands

Source: ICBS (2007 data is provisional)

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

Palestinian workers

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 immigrantsduring 1990-2000

Graph 2: Non-citizen Palestinian and Foreign Workers with work permits, annual averages, 1970-2007, thousands

Source: ICBS (2007 data is provisional)

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350.0

Palestinian workers FW w permits

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 immigrantsduring 1990-2000

Graph 3: Non-citizen Palestinian and Foreign Workers (with and without work permits), annual averages, 1970-2007, thousands

Source: ICBS (2007 data is provisional)

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350.0

1970

1971

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2005

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2007

Palestinian workers FW w permits FW w/o permits

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 immigrantsduring 1990-2000

Graph 2: Percentage of non Israeli citizens (out of employed): Palestinian and Foreign Workers (with and without work permits), and general unemployment rates, annual averages, 1970-2007

Source: ICBS (2007 data is provisional)

0%

2%

4%

6%

8%

10%

12%

14%

Palestinians FW with permit FW without permit unemployment rates

1 million Jewish immigrantsduring 1990-2000

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