Israel Is Also Waging an Economic War Against Palestinians

Since October 7, 2023, Israel has been depriving hundreds of thousands of Palestinians of access to work and wages. This has created a crisis that has driven millions of Palestinians in Israel and the West Bank into poverty.

Minister of Finance Bezalel Smotrich and Prime Minister Benjamin Netanyahu attend the weekly cabinet meeting at the Defense Ministry in Tel Aviv on January 7, 2024. (Ronen Zvulun / AFP via Getty Images)

Since October 7, when Israel began its assault on Gaza in response to Hamas’s surprise attack, newspapers around the world have rightly focused on Prime Minister Benjamin Netanyahu’s crimes in Gaza. Relatively little attention has, however, been devoted to his abuses of power at home where hundreds of thousands of Palestinian workers from the West Bank have been denied wages, along with the components of a dignified existence and civil liberties. Much like Netanyahu’s brutal campaign abroad, which is currently being investigated for genocide by the International Criminal Court, Israel’s denial of deprivation of hundreds of thousands of Palestinians of their rights has also drawn international legal attention.

On September 27, 2024, international trade union federations filed a complaint against Israel with the International Labour Organization (ILO) — one of the oldest international regulators based on tripartite collaborations between labor, capital, and governments. In their complaint, the unions argue that since October 7, the Israeli government has deprived millions of Palestinians who were employed in Israel for years until October 7 of their rights to livelihood and a dignified existence.

The discussion to be held in a tripartite tribunal at a yet-to-be-specified date will examine Israel’s violations of international conventions it has signed, primarily the convention ensuring the right to basic wages. In their request, the unions argue that Palestinian workers, who have been locked out of work since October 7, 2023, are still effectively employed and therefore entitled to their wages and, accordingly, access to their work. Although the ILO lacks the authority to impose sanctions, the upcoming discussion will affect Israel’s standing in the developed world. Meanwhile, in Israel, there is deafening silence.

Israel’s responsibility for Palestinians’ livelihood stems from its military control of the territories, both in the West Bank and the Gaza Strip. For decades, Israel’s policy has ensured Palestinians’ dependence on the Israeli labor market while deliberately and systematically preventing the development and independence of the Palestinian economy. From draconian restrictions on movement of goods and people to blocking the development of industrial zones, these policies have made work in Israel the most lucrative alternative and therefore preferred by many.

This situation makes preventing Palestinians from working in Israel in jobs from which they have not been dismissed, or from receiving their pension savings or severance pay, a blatant violation of international conventions, primarily the 1949 Protection of Wages Convention. The duration of the ongoing war, and the Israeli government’s unwillingness to agree to a cease-fire, has had the consequence of prolonging the hardship of many Palestinians who are not directly affected by the violence in Gaza.

The facts forming the basis for the legal proceedings are severe: since October 7, the Israeli government has prevented the entry of over 150,000 Palestinian workers, mainly from the West Bank but also from the Gaza Strip, who were employed there before the war. Through this action, the government is creating poverty and distress for hundreds of thousands of unemployed workers and their families. These are the stronger and wealthier workers in the Palestinian Authority territories, who earned relatively high wages in Israel until October 7.

Their exclusion from the Israeli labor market harms not only their families but the Palestinian economy as a whole, which has been dependent on the labor of Palestinians working in Israel since 1967. Since the establishment of the Palestinian Authority, salaries of Palestinian workers employed in Israel have been one of its major sources of tax money, accounting for around 20 percent of total tax revenue.

Many government officials (like Minister of Finance Bezalel Smotrich or Minister of Police Itamar Ben-Gvir — both from extreme right-wing settler parties) pride themselves on this policy of exclusion and prevention, and publicly commit to continuing it. At the same time, data indicates this policy has led to soaring unemployment rates in the West Bank, driving sharp deterioration of income, and deepening material distress and poverty. Against the shocking hunger and poverty in Gaza, these harsh facts pale. However, the combination of war and economic exclusion has had the effect of simultaneously impoverishing and starving Palestinians in Gaza and the West Bank.

This policy has no security or economic rationale. The financial and security establishment — from the Bank of Israel and high-ranking officials in the military and secret services to security-related think tanks (such as the Institute for National Security Studies) — has argued since the days following October 7 that Palestinian workers should be allowed to enter Israel to work. This was recently reiterated by the Minister of Interior (Moshe Arbel, from the ultra-Orthodox Shas party). Allowing Palestinians to work in Israel would, they have argued, reduce material distress in the occupied territories and prevent the resulting social unrest and security risk.

Employers also desperately need workers in the construction, industry, nursing, and tourism sectors, which struggle without available (cheap and under-protected) labor. Government attempts to recruit migrant workers as replacements have so far had only partial success. From employers’ ongoing calls to bring back Palestinian workers, it appears this is another front where the government’s dogged commitment to war is creating a generalized crisis across the country.

Seen from a purely economic lens, Netanyahu’s actions are irrational. However, the rationale that motivates Netanyahu and his ilk is somewhat more complicated and cannot be understood in narrowly economic or security terms. Netanyahu, along with his fanatical right-wing political partners — Smotrich and Ben-Gvir are only two of them — is motivated by a desire to destroy Palestinian society, dismantle the Palestinian Authority, and expand Jewish settlement, using economic and political oppression of Palestinians to achieve this end.

Therefore, the Israeli government undermines security coordination with the Palestinian Authority, and while it prevents Palestinians from entering Israel, it permits the employment of thousands of Palestinians in settlements. This policy exposes the government’s true face — not security, not economy, but an ideology of dispossession and destruction.

The legal proceedings in the ILO expose not only the enormous economic damage but primarily the moral crime that contradicts the values on which the global economy has been based since World War II. This crime stands in sharp contrast to international conventions to which Israel has voluntarily committed for decades — conventions that inform basic labor laws and labor law in Israel itself.