A Palestinian laborer works on a construction site in the new Palestinian town dubbed Rawabi or "The Hills", near the West Bank city of Ramallah.
(photo credit: REUTERS)
The government on Sunday approved plans to permit roughly 20,000 Chinese guest workers to come to Israel and work in construction, a step it says will help speed up building and bring down the cost of housing.
“We are doing this in order to accelerate the construction of new apartments,” said Prime Minister Benjamin Netanyahu.
“In my view, this is a necessary and important step to lower housing prices. As with every step there are always side costs, but the overall considerations vis-à-vis the ability to build many apartments, thereby increasing supply, will in the end allow us to change price trends.”
Finance Minister Moshe Kahlon said the influx of workers would both reduce the labor costs of construction workers and expedite the process of building tall buildings by 20%-30%. That would shave some NIS 50,000 off construction costs, though not all of those savings would be passed to consumers. The Association of Renovation Contractors said the influx would also reduce renovation prices some 7%, as nearly a third of the associated costs went to labor.
The Chinese workers, he said, were “a quality and skilled labor force that is a critical factor for increasing the supply.” The Finance Ministry estimated that in terms of productivity, workers from China were twice as efficient as Palestinian construction workers.
The decision will be reviewed in two years at the behest of Education Minister Naftali Bennett.
For several years, Israel has been in negotiations with China’s government over a bilateral framework for bringing in more construction workers. Sunday’s plan went forward without such an agreement, and instead will operate via Chinese state-owned manpower companies and a separate set of supervisory mechanisms.
Early last year, the Association of Contractors and Builders in Israel warned that the government’s inability to seal a deal with China on new workers made the state overly reliant on Palestinian labor. At the time, roughly 28,000 of Israel’s construction workers were Palestinian, and just 5,000 from China or Europe. A major security incident could endanger Israeli building, the association warned at the time.
The Federation of Israeli Chambers of Commerce, a business alliance, praised Sunday’s decision.
“Labor inputs are a central component of the cost and efficiency of construction. Israel’s government has taken a correct decision, which must be set in motion immediately,” said FICC deputy director-general Dan Carmeli.
But the decision, which came just a few weeks after Netanyahu declared that Israel could not take on any Syrian refugees, raised ire from opposition parties.
Labor MK Shelly Yacimovich likened the decision to slave trafficking, and said that “the government is seriously hurting the poorest workers in Israel.”
Average foreign workers earn roughly half of their Israeli counterparts, but still takes in more than the minimum wage, according to data from the Central Bureau of Statistics.