The Palestinian Labor Market in Israel: Between Globalization and Intifada

The status of the Palestinian labor market in Israel has been seen as a function of changing levels of regional tension, depending particularly on Israel's security/punitive policy of border closure and work permits. But this is not the whole picture. The decline of the Palestinian labor market in Israel is not exclusively related to peaks of violence, although no doubt affected by them. If one takes into account the fact that the Israeli economy between 1967 and 1987 owed much of its prosperity to Palestinian labor, the decline of the latter's role in Israel probably warrants a more complex explanation than just violence. After the establishment of the PNA (Palestinian National Authority) in 1993, many Palestinian laborers could work both in Israel and the PNA. However, the second Intifada (2000) has again inflicted a blow upon this market. Considering the present Israeli economic trends, this blow may now be irreversible. The economic functioning of the PNA has not been a success story. Between the first Intifada (1987-1991) and the second (2000) Intifada Palestinian consumption has decreased significantly. Since September 2000 the violent events have caused additional damage and the future does not look rosy. It can now be assumed that a settlement that includes some kind of political "independence," has become less realistic than it looked just a few years ago. Nonetheless, even if this eventually occurs, Palestinian economic "independence" seems more and more problematic. On the Palestinian side, there are voices that argue (or hope) that Israel and the Palestinian state (if and when it is established) will eventually maintain close economic contacts, including the resumption of employment of Palestinian labor in Israel. Others, however, consider alternative employment options for the Palestinian laborers who used to work in Israel prior to the recent Intifada, including their re-exportation to Arab countries, especially the oil-producing ones. At any rate, it is evident that at the time of writing (early 2002) employment opportunities for a significant number of Palestinian laborers both in the PNA and in Israel are poor. Current international and regional conditions and power relations do not indicate that the Palestinian party can reverse this trend.