Importing Foreign Workers Is Not Employment Policy

A new Labor Ministry report warns that importing foreign workers, intended as a temporary solution to labor shortages, has become a permanent policy that erodes wages, harms organized labor, and hinders the progress of the Israeli economy. The author, chairman of the Pelephone workers' committee, argues that expanding quotas prevents wage competition and investment in technology.

A new report from the Ministry of Labor, published this week and barely receiving public attention, warns that importing foreign workers has shifted from a temporary response to labor shortages to a permanent policy. The war created an unusual reality with the cessation of Palestinian worker entry, but now quotas continue to expand. The report points to a direct link between an increased labor supply and wage stagnation – real wages have barely risen despite the shortage. Additionally, the policy undermines the incentive to invest in technology and innovation, and weakens organized labor since foreign workers depend on their employer and residency permit. The author, Yehiel Shaman, chairman of the Pelephone workers' committee, emphasizes that foreign workers are not the problem, but rather government policy. The report presents the government with a choice between an economy based on cheap labor and one that rewards skill and innovation.