economy has been booming, and among the results is that the tiny country has become a magnet for foreign workers both illegal and illegal.
But by far the most burning economic issue is a new offensive by Prime Minister Benjamin Netanyahu to reduce the number of migrant workers in Israel. According to the Finance Ministry, there are about 250,000 guest laborers employed in Israel—about half of whom are working illegally. Working mainly in construction, agriculture, caregiving and as restaurant cooks, they account for more than 10 percent of the Israeli labor force.
“The massive influx of foreign workers to Israel in recent years has created problems of security and drugs, but mainly it has [flooded] the labor market and weakened wages,” Netanyahu said at a press conference last week unveiling a policy to crack down on employers and deport illegal aliens.
The prime minister said last week that Israel’s economic success has made it necessary to build a barrier on the border with Egypt in order to block migrant workers.
“Israel is actually the only country in which one can enter on foot from one of the more battered Third World countries,” he said. “We are going to set up a barrier. Otherwise, a flood will come and we can’t allow ourselves to be swept away. We established a Jewish and democratic state and we can’t allow to be turned into a state of foreign workers.”
Critics of Netanyahu’s new push against foreign workers criticized his rhetoric as a “fear campaign” against the migrants, according to a Haaretz editorial.
Spokespersons for the Association for Civil Rights in Israel and the Hotline for Migrant Workers said that the government is right to step up enforcement against employers. But the reform does not solve the “revolving door” phenomenon by which Israeli brokers charge exorbitant fees to tens of thousands of guest workers annually to obtain work visas that lapse after a few years.
They also claimed that Netanyahu-led governments have contributed to the problem by granting a record number of visas annually.
Israel’s Finance Ministry has been grappling with the problem since the mid-’90s, and has embarked on two waves of crackdowns against foreign workers in the last decade, said economist Dar, a former treasury employee.
“You get addicted to foreign cheap labor—it’s a phenomenon all over the world, and in Israel as well,” she said. “I’m going to wait until I see the results.”
While the issue of immigrant workers poses a problem for Israel’s economy, the overall picture is that the country is in much better condition than the U.S. and most European economies.
This week, $1.5 billion worth of government bonds due in 2019 were listed for public trading on the New York Stock Exchange, another boost to the country’s international profile.
Finance Minister Yuval Steinitz, who was in New York on Tuesday to inaugurate trading, said the milestone would “widen the participation of the State of Israel in international markets and the ability of its business sector to raise money in these markets.”
And then there’s the buzz from “Start-Up Nation.” In the book, Jerusalem Post editorial editor Saul Singer and Council on Foreign Relations fellow Dan Senor try to explain the story of Israel’s overachievement in technology. They claim that the country’s adverse geopolitical realities combined with the lack of natural resources—and a healthy dose of chutzpah—placed a premium on innovation.
“Early on, Israel realized it needed to innovate in order to survive,” Singer said in an interview with Fox News last month. “As a result, it does well in downturns. Innovation is what is real in economic growth. It’s not real estate, it’s not a credit bubble. It’s what productivity and growth is based on.”