Miles of Palestinians have spent months indoors with little to do. Since October 7, many have watched their bank accounts shrink while anguish over inactivity grows. Their children’s stomachs rumble, and every dawn marks another broken promise, fueling rising despair and frustration. As one observer notes, these people have not only lost income but are already facing hunger while driving luxury cars and living in two-story homes. Across the occupied West Bank, about 150,000 Palestinians who previously worked in Israel have sunk into poverty and desperation.
Seven hundred fifty days ago, Israel restricted entry for more than 150,000 West Bank workers, with 40,000 of them entering without permits. Some 25,000 Gaza employees saw their permits canceled and were forced to return to their homeland, now besieged by bombardment. Since then, most have joined the already troubling unemployment figures within the Palestinian economy. There is no near term or midterm prospect of return. In the future, nothing is certain. One analyst explains that Israeli society is not prepared to accept their return and does not want them partaking in common activities within Israel. To many Israelis, Palestinians are now seen as terrorists. Another leader of a Palestinian workers’ association laments this shift and its impact on workers’ livelihoods.
“Interdependent”
Around the Green Line, both sides face renewed distrust. In the occupied West Bank, tens of thousands have lost work without any compensation. Workers have seen permits renewed with the intention of returning to Israel, yet access at entry points remains blocked. There is no unemployment insurance or formal support from either the Palestinian Authority or Israel, leaving 150,000 people with no household income for six months, driving extreme hardship and poverty. Some rely on family support or temporary jobs, but nothing compares to life before October 7. In Israel, the prior earnings were roughly ten times higher, notes one interviewee.
On the Israeli side, the consequences are also severe. The construction sector, which employed around 100,000 Palestinians, faced a collapse in housing activity by late last year. Residential construction fell by about 95 percent, halting many projects and delaying others. About 40 percent of the sector remains at a standstill. That sector accounts for roughly 6 percent of the Israeli economy and could trigger a contraction of two to three percent until a solution is found. Analysts point out that cheap Palestinian labor has played a crucial role in the economy, a pattern long linked to the historical use of subcontracted Palestinian labor for industrial tasks.
In 2022 there were about 200,000 Palestinians in the West Bank, highlighting the extent to which Israel depended on inexpensive Palestinian labor. Palestinian workers in Israel and surrounding settlements comprise about 22 percent of the West Bank’s workforce. Their poverty affects the broader population, since their lack of income, which forms nearly a fifth of the Palestinian Authority’s GDP, hinders growth in other areas. The loss of jobs also harms regional economic activity, and the international labor organization predicts unemployment in the West Bank and Gaza might rise above 50 percent, with as many as half a million jobs lost. After nearly six months of conflict, only about 30,000 Palestinians have been able to return to work, most in settlements considered illegal under international law.
Alternatives in Southeast Asia
Israel has explored options beyond its borders. The current quota allows the hiring of about 65,000 workers from Southeast Asian countries such as India, Sri Lanka, and Uzbekistan. The abduction and killings of farmers from Thailand or the Philippines in border communities during the October 7 events triggered a mass exodus of their citizens. Employers prefer Palestinian workers, but training them takes time. Israelis are not fully satisfied with their jobs, and years of experience show that hiring distant workers adds housing and shelter costs for the employer. For decades, Palestinian workers have refined skills that help set the stage for new construction, yet bringing in workers from far away raises additional expenses for the employer.
The political sensitivity around this issue has delayed firm policy decisions in Israel. Despite calls from employers to return, society does not seem ready to live again alongside people whom they blame for the most traumatic day. Beyond the economic implications, the potential return could affect the future relationship between Palestinians and Israelis. In the end, both peoples are here to stay, so new arrangements must be found that enable working and living together. Tens of thousands of Palestinians in the West Bank rely on those promises for a future with decent wages. The sense that everything is temporary and no real decisions are made remains intolerable, according to several observers speaking on behalf of the workers.