How the economy could benefit from staving off deportations

African asylum seekers line up to apply for a visa in Bnei Brak, Israel (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
African asylum seekers line up to apply for a visa in Bnei Brak, Israel
Like an old campaign slogan, Israeli businesses may benefit from Monday’s agreement between Israel and the United Nations – as half of the African migrants will stay and half will move to Western countries.
Many of the almost 40,000 African migrants, mostly hailing from Eritrea and Sudan, were working in tough jobs – such as cleaning office buildings and hotel rooms, laboring in construction and unloading warehouse goods.
In other words, a lot of the migrants are performing jobs that Israelis do not want to do. And with record-low unemployment of 3.7%, the labor market is already tight, with little wiggle room.
Prior to the security disturbances of the second Intifada, many of these jobs were taken by Palestinians. But after multiple suicide bombings, Israel partially restricted their entry and began to rely more on foreign workers.
The possible expulsion of migrants has threatened a number of industries, with Tel Aviv restaurants complaining about a lack of dishwashers and hotels in Eilat not knowing how they would operate.
In recent months, the government said that it could increase the number of Palestinian work permits from the West Bank. But a terrorist attack would change that equation.
Now, businesses and restaurants across Israel will avoid the pressing problem of a labor shortage.
Last September, the High Court of Justice ruled that the state could force employers of migrants to deposit 16% of their pay into a closed account – available only when the migrant left Israel. On top of that, workers were required to deposit another 20% of their salary into that account.
That forced many establishments to start paying workers under the table as the forced deposits were too onerous. It is unclear yet when the deposit requirements will be lifted.
There are around 90,000 legal foreign workers in Israel, many from Thailand and Eastern Europe, with another 90,000 people who have likely overstayed their visas, according to the Center for International Migration and Integration.
Some 100,000-110,000 Palestinians currently work in Israel, including some 30,000-40,000 laborers without permits, while 30,000 work in West Bank settlements.
In term of specific industries, 16,500 foreigners are approved to work in construction. In February, the government decided to increase that quota by 6,000, partially in response to the planned deportations.
Another 50,000 foreign caregivers help take care of the elderly, almost 30,000 of them hailing from the Philippines, according to workers’ rights group Kav LaOved.
Given the tight labor market, the economy could benefit from legalizing the migrants’ status. And if they receive proper work permits and eligibility for social services, they could relocate to other parts of the country – reducing pressure on under-invested neighborhoods like south Tel Aviv.
Without today’s agreement, the state would continue spending billions of shekels to deport the migrants and compensate Rwanda and Uganda with no clear benefit for regular Israelis. And employers would be scrambling to find people to wash dishes and pick crops.
That doesn’t sound smart for the economy.