Organizing Labor in the Occupied Territories

In response, Ziadeh’s Israeli employer fired him and revoked his work permit, alleging that he was a “security threat.” But after a prolonged legal battle between the employer and workers in the Israeli courts — along with a strike staged by the workers — the judge ruled that the employer was obligated to reinstate Ziadeh’s permit, allow him to return to work, and compensate him for two years of missed pay. Along with this, the court ruled that the Palestinian workers had the right to organize a union.

In 2017, soon after Ziadeh returned to work, the workers at the Zarfaty garage became the first Palestinian workers from the West Bank to ever sign a collective bargaining agreement with an Israeli employer. Since then, Palestinian workers in other shops and factories in the settlements have also successfully unionized.

“It was a very proud day,” Ziadeh remembered, sitting at a cafe outside Mishor Adumim shortly before October 7. Palestinian men were lined up at the checkpoint of the settlement’s entrance, each one checked by private security guards. “It felt like I had won the battle. And I beat my Israeli boss through his own courts.” Ziadeh chuckled at this thought as he sipped a paper cup of bitter coffee.

Now, however, life for Palestinians who worked in Israel and its settlements has turned upside down — with their hopes of better pay and working conditions crushed over the last few months. Since October 7, when Hamas carried out a complex assault against Israel, the Israeli army has obliterated the besieged Gaza Strip, killing more than thirty thousand Palestinians in what many observers say could amount to genocide.

Following Hamas’s unprecedented attack, which resulted in the deaths of hundreds and the capture of approximately 240 Israelis, as well as some foreigners, Israel closed all checkpoints in and out of the West Bank. It barred Palestinian workers from their jobs in Israel and its settlements, leaving many destitute, with no money for rent, loan payments, or their children’s tuition.

As the war drags on into its sixth month, the situation for workers is becoming more and more desperate. Thousands of workers from Gaza who had received permission to work inside Israel shortly before October 7 were detained and held incommunicado for weeks. Some endured humiliating ill-treatment and torture by Israeli forces before being either returned to Gaza or released in the West Bank. Others fled into the West Bank from Israel out of fear for their safety.

I interviewed several Palestinian academics for this story, and they unanimously emphasized that the realities faced by these workers were shaped over half a century ago, when Israel occupied the West Bank and Gaza. They highlighted how Israel’s actions strangled the Palestinian economy, leading to a heavy reliance on Israeli wages for a large portion of the Palestinian workforce. According to them, subjecting Palestinians to exploitative and abusive conditions in Israel and its settlements was a deliberate strategy employed by Israel to establish colonial domination over Palestinians.

Occupied Economy

Approximately ten thousand Palestinian workers have been allowed to return to their jobs in Israel’s settlements, albeit under tighter security measures. However, many others have been left with no income, and the unions, which some workers fought tirelessly to establish, have done little to help them.

Before October 7, around 150,000 to 200,000 Palestinians held permits to work inside Israel or its settlements, with the majority employed by the construction industry. However, many Palestinians also work informally, without a permit.

Ziadeh was allowed to return to his work at Zarfaty after about a month, but the Israeli army erected a checkpoint near the Palestinian village of Khan al-Ahmar, located about three miles away from Mishor Adumim. Palestinians are currently prohibited from crossing this checkpoint. As a result, Ziadeh’s Israeli employer, who is now always carrying a gun, must come to pick the workers up and transport them to the garage.

“The Israelis are treating us very badly,” Ziadeh tells me. “It has become scary. If one of them sees you even smile or laugh, they will threaten to get you fired. We are always feeling unsafe, and we have to be very careful.” All the Israeli employers are now strapped with machine guns, and the Palestinian workers are not allowed to walk around inside the industrial zone.

The fate of Ziadeh, and the tens of thousands of other Palestinians dependent on work in Israel and its settlements, was sealed in 1967, when Israel occupied the West Bank, including East Jerusalem, and the Gaza Strip. This occupation subjected the territories to harsh military control.

Land Grabs and Tariffs

According to Leila Farsakh, a Palestinian political economist and professor of political science at the University of Massachusetts Boston, at the end of the Third Arab-Israeli War in June 1967, Israel faced a significant demographic and economic challenge posed by the large Palestinian population in the West Bank and Gaza Strip. This challenge conflicted with Israel’s Zionist goals of establishing a Jewish majority in the lands of historic Palestine.

“Israel found itself in control of nearly a million Palestinians living between the West Bank, the Gaza Strip, and East Jerusalem,” Farsakh tells me. “These Palestinians formed the equivalent of 30 percent of Israel’s population at the time.”

In contrast to the events of 1948, when around 80 percent of Palestinians who lived on lands that became part of the Israeli state either fled or were expelled from their homes, numbering about 750,000 people, a smaller number of Palestinians in the West Bank and Gaza fled during the 1967 war. By that time, two-thirds of the Gaza Strip’s population was made up of refugees who lost their land in 1948, resulting in densely populated areas. Comparatively, the West Bank, with its more rural landscape, possessed more land and freshwater resources than the Gaza Strip.

“Israel did not wish to incorporate them into the Israeli polity for fear of jeopardizing the Jewish character of the state,” Farsakh tells me. “The question of what to do with these people, both politically and economically, was central to the cost of occupation, to labor migration, and to the ability of Israel to assert its territorial claim over the area.”

The first thing Israel did was put the West Bank and Gaza Strip under the military’s control, confiscating huge swathes of Palestinian public and private lands for security and firing zones, and later for settlement construction and nature reserves. By the mid-1980s, 39 percent of the West Bank and about 31 percent of the Gaza Strip had been mapped as Israeli state land.

According to Israeli rights group B’Tselem, during the first thirty-six years of occupation, Israel seized almost two million dunums of Palestinian lands — 200,000 hectares — leasing it out to official representatives, such as the Jewish Fund or the Israel Land Administration, or to private citizens for settlement construction. Various restrictions on Palestinian trade and economic development accompanied the mass confiscation of land.

The West Bank and Gaza Strip were forcibly incorporated into a customs union with Israel, Farsakh says, with Israel imposing restrictions on the kinds of commodities that can be imported or exported from the territories, protecting Israeli agriculture. Additionally, Israeli officials unilaterally set an external tariff structure. Farsakh explains that any trade with the rest of the world had to go through Israel and be handled by Israeli agents.

Israel enforced a monetary union with the Palestinian territories, adopting Israeli currency as official tender and shutting down all but two banks in the West Bank and Gaza Strip, which were under Israeli supervision. Israeli authorities prohibited investments from Israel — or abroad — in the Palestinian economy. The Israeli military exercised full control over the budgets in the West Bank and Gaza, including taxation and collection.

Palestinians were forced to pay income taxes 3 to 10 percent higher than those levied on Israelis for the same range of income. Farsakh notes that, between 1967 and 1971, the Israeli military establishment issued over two hundred orders regulating Palestinian economic life and tied investment to military approvals.

Land confiscations and restrictions on trade and investment caused the agricultural sector, which had once employed a large portion of the Palestinian labor force, to collapse. According to Farsakh, the commercialized agrarian economy in the Palestinian territories absorbed nearly 40 percent of the total labor force in 1967. By 1993, when the Oslo Accords were signed between Israel and the Palestine Liberation Organization (PLO), agriculture employed less than 20 percent of the Palestinian labor force.

“The result of this specific form of integration was to insert a small, mainly agrarian Palestinian economy into an occupying industrial economy,” Farsakh explains. “Labor flows were the first element in binding the Palestinian economy to Israel.”

During the early years of the occupation, some Israeli officials opposed Palestinian employment in Israel, fearing it would displace Jewish workers. Over time, however, most recognized that reducing unemployment in the Palestinian territories could pacify political unrest.

The resulting economic arrangement, which allows Palestinians to seek jobs in Israel in sectors that lack sufficient Jewish labor, such as construction, agriculture, and the service industry, was beneficial to Israeli employers in various ways, but ultimately damaging to the Palestinian national economy.

A Tale of Two Economies

For the first two decades of Israel’s occupation, during which Palestinians in the West Bank and Gaza were permitted relative freedom to move between territories, the portion of individuals seeking work inside Israel or its settlements surged, skyrocketing from virtually zero before 1967 to about 40 percent in 1987, when the first Palestinian intifada erupted.

Palestinians receive much higher wages in Israel than in Palestine. Unsurprisingly, they are, according to Ibrahim Shikaki, assistant professor of economics at Trinity College, “a significant part of the labor force.”

“There was a sweet spot for the Israeli firms because, on one hand, they were paying Palestinians more than what they were being paid in their domestic economy, and, on the other hand, they were paying them less than what they would need to pay the Israeli Jewish workers,” Shikaki tells me. “One of the main ways of increasing profit is by limiting labor costs — and what better way than by having a reserve army of unemployed that you can tap into whenever you want.”

This abundant supply of cheap labor enabled Israeli firms to lower production costs and generate high profits at low prices, often underselling Palestinian and imported goods. Shikaki explains that this arrangement further benefitted Israel by “pacifying the normal tension between capital and labor, between employer and employees.”

“The Israeli employer can pay that Israeli worker a little bit more and they can have more opportunities for promotion. And the employer can do that only because he is exploiting that other segment of labor, which is Palestinian,” Shikaki says.

As Israel confiscated huge areas of Palestinian land, previously self-sufficient communities saw their livelihoods vanish, leading to a dramatic shift in class. Many self-employed Palestinians who once worked in agriculture became wageworkers in the Israeli economy.

According to Farsakh, throughout the 1980s, Palestinian workers from the West Bank and Gaza made up nearly 40 percent of all workers in Israeli construction. Palestinian citizens of Israel, who were absorbed into the state in 1948, represented another 20 percent. This meant that 60 percent of workers in Israel who were building homes for Israelis — including in the illegal settlements — were Palestinian.

In the 1970s and 1980s, the Israeli labor market was much more important to the Gaza Strip than the West Bank, Farsakh notes. Palestinian labor flows to Israel represented more than 40 percent of the employed workforce in Gaza and 30 percent in the West Bank.

“Once you take away 40 percent of the labor in the Palestinian economy that means that Palestinians are producing very little,” Shikaki tells me. “And with the income that Palestinians take back home, they end up buying Israeli goods.” This means that the value that is added to the Palestinian economy — through higher wages — is, as Shikaki explains, “being recycled back into the Israeli economy.”

Checkpoint Work Queues

Following the First Intifada, Israel imposed a new system of closure for Palestinians seeking work in the Israeli economy. “Palestinian labor in Israel became a way of control and domination over the Palestinian people, in general, and specifically the workers,” explains Tareq Sadeq, assistant professor in the department of economics at Birzeit University.

Israel erected dozens of army checkpoints throughout the Palestinian territories and imposed a permit regime on Palestinians in the West Bank and Gaza, severing their access to East Jerusalem. Palestinians who received permits to work inside Israel lined up for hours each day to travel to their jobs inside Israel. While this checkpoint and permit system was introduced soon after the First Intifada, it was institutionalized by the Oslo Accords in 1993 and perfected after the Second Intifada in 2000.

Now, Palestinians obtain biometric ID cards from the civil administration, a branch of the Israeli army. Work permits are only issued when an Israeli employer files a permit request with the interior ministry and only after Palestinians pass an army security clearance. A lucrative black market trade in permits has subsequently developed, in which brokers extract money from workers in exchange for access to work.

Palestinians are only permitted to work for the employer listed on their permit, which contains both the worker’s details and their employer’s. They are only allowed to travel to the area of their work and must return to the West Bank before a certain hour or risk arrest.

These biometric cards are needed to cross overcrowded checkpoints, some of which were renovated a few years ago to include automatic gates. At some checkpoints, Israel has implemented automatic AI-powered facial recognition for Palestinians.

Due to the restrictions on entering Israel, an increasing number of Palestinians in the West Bank sought work in the illegal settlements. “For many workers, it became easier for them to work in the settlements because they are closer to their places of residence — sometimes working in the settlement that was established near their village or refugee camp,” Sadeq tells me.

The many limitations on Palestinian economic growth, particularly in the agricultural industrial sector, left Palestinians with limited options, leading many to choose work in the settlements for survival, Farsakh says.

“Bantustanization”

After Oslo, Palestinians in Gaza were completely barred from working in Israel, despite its population having been more dependent on work in Israel than those in the West Bank. According to Farsakh, Israel’s labor policies aligned with its political plans of relinquishing its responsibilities over the Gaza Strip.

Unlike the West Bank, which contains many important religious sites for Judaism, the Zionist movement did not have much religious and ideological interest in the Gaza Strip, leading Israeli leaders to view the territory as a mere nuisance.

“Israel’s plan has always been to use Palestinian labor to build its settlements and then eventually get rid of them,” Farsakh tells me. “It was able to do this with the Gaza Strip but not the West Bank because Israel wants to continue controlling it.”

As unemployment in Gaza rose sharply — reaching devastating levels after Israel implemented a siege on the territory in 2007 — Palestinians in the West Bank continued to work inside Israel and its settlements, thereby reducing the overall unemployment in the territory. “These changes suggest that the Gaza Strip was being separated from the Israeli economy, while the West Bank continues to be integrated,” Farsakh explains.

Following the Oslo Accords, the establishment of the Palestinian Authority brought new job opportunities in the public sector, employing about 20 percent of Palestinians. However, this sector remains dependent on external dynamics. “It is very difficult to create employment in the Palestinian economy, so you have continued dependency on both international aid that feeds the public sector and Israel that controls the Palestinian workers in Israel,” Shikaki says.

Israel also often withholds taxes collected on behalf of the Palestinians as a punitive measure. Several public workers in the West Bank tell me they have not been paid since the conflict in Gaza erupted six months ago.

Israel maintains strict control over more than 60 percent of the West Bank, known as “Area C,” prohibiting Palestinian development while Israeli settlements continue to grow. “The Palestinian economy is an economy of survival,” Farsakh says. “It is not one of independence that has the opportunity to grow and thrive. It is one that allows individual prosperity [from higher wages in the Israeli economy] often at the expense of national growth.”

This reality has created what Farsakh has termed the “Bantustanization” of the West Bank. “Israel inadvertently created an apartheid reality by trying to incorporate the maximum amount of Palestinian land in the West Bank without the Palestinian population, while relying on Palestinian labor,” Farsakh explains. “What this did was turn the Palestinian areas — encircled by checkpoints and settlements — into population reserves.”

Hope and Despair

“Sometimes we would be forced to work until late at night,” recounts fifty-three-year-old Adle Ayad, one of more than a dozen Palestinian women who, in 2019, formed a union at Mevashlim Bishvilec, a factory in the Mishor Adumim industrial zone that produces stuffed vegetables. “Our employer paid us way below minimum wage, fired us whenever he felt like it, and would cut our wages.” For years, employees were paid by the number of pots they filled with vegetables, and not according to the hours they worked.

The mistreatment of Palestinian workers in Israel and its settlements has long been well-documented, with those in settlements often facing the worst violations of their rights.

Ayad, a mother of six children from Ramallah, tells me she has “no choice” but to seek work in the settlements, despite the abusive and exploitative work environment. Her husband is a farmer and cannot support the family all year round. “I just keep my head down and do the work so I can bring home some money to my family,” Ayad says.

Following a two-day strike, Ayad’s employer finally acquiesced to a collective bargaining agreement. The agreement ensured the Palestinian workers the minimum hourly wage, holidays, paid sick days, and workplace accident insurance. While Ayad tells me she was initially hopeful about the union and its role in harnessing the collective power of the workers, since October 7 that hope has been shattered.

Ayad was allowed to return to her work three weeks after October 7, but she tells me her employer has not honored previous agreements, taking advantage of the current vulnerability of the Palestinian workers. “Our salaries have decreased since the war,” Ayad says, adding that they have returned to piece-rate pay — they are paid by the pots filled instead of hours worked. She also notes that her bosses “even calculate the boxes wrong and pay us less than what we did. When we complain, our boss tells us to go find another job if we don’t like it.”

According to Yoav Tamir, a workers’ advice center representative, tens of thousands of Palestinian workers, now left with no employment, have little recourse to change their situation. Despite all of them having a pension fund in Israel, they face a significant obstacle: they were not fired and did not quit but are now stuck behind closed army checkpoints, which prevents them from accessing the funds. “In order to get money from the pension fund, they need to stop working,” Tamir tells me. “But if they stop working then they forfeit their work permit.”

“The situation now is very dire, and most of the West Bank economy is on the brink of collapse because there is no money coming in at all and workers are not working,” Tamir says. “People have children they can’t feed, and the situation is on the verge of exploding.”

As construction has almost completely stalled throughout Israel and its settlements since October 7, Israeli authorities have verbalized their intention to replace the Palestinians with foreign workers from various countries. However, Palestinian analysts tell me this scenario of successfully replacing Palestinians with foreign labor is highly unlikely. Tamir has also stated that such a plan is “not possible.”

“One reason that makes Palestinian workers desirable for Israelis is that these work permits allow Palestinians to work — but not sleep — in Israel,” Shikaki explains. “And that for Israel means the employers do not need to pay the public and service needs it would need to with foreign labor that must move their lives to Israel.” Foreign workers have encountered widespread abuse in Israel.

“The other reason pertains to the ideology of the Israeli state,” Shikaki continues. “Israel wants to be a homogenous Jewish state. But bringing more and more people from places like India, Thailand, Moldova, Sri Lanka, is going to threaten and undermine that.” Most likely, Palestinians will eventually be allowed back into Israel and the rest of the settlements, but with much tighter restrictions and more security checks. “Slowly they are going to allow the workers to go back because [Israel] can’t survive without them,” Shikaki says.

Ayad says she now has “no confidence” in the union for which she and the other women at her job fought. However, Ziadeh tells me he is still proud of the workers’ achievements. At his garage, their Israeli employer has continued to respect their signed labor agreement. “I still believe we did a good thing for all the workers,” Ziadeh says.

Others, however, have little optimism. One worker, who requested anonymity, said simply: “What’s the point of a union if Israel can just close the checkpoints and not allow you to go to your job?”