10 Weeks into the War: Unravelling the Impact of the Conflict on Economy and Society

In the heart of an enduring conflict, Israel grapples with the profound and far-reaching impact of the atrocities of October 7, and the consequent war in its 10-week struggle against Hamas. As the nation contends with the physical and emotional toll of the conflict, the multifaceted repercussions are rippling across the Israeli landscape. From the collective depression gripping the nation to the economic fallout leaving hundreds of thousands without income, each facet of Israeli society navigates uncharted territory.

It is with no doubt that a collective depression grips the nation. The emotional toll on the different sectors of society, be it Jews, Arab-Israelis, Palestinians, and people of minorities, is compounded by the incomprehensible amount of casualties, rape, kidnapping, and inhumane atrocities Hamas has launched against us, indiscriminately targeting all Israelis and others in Israel. The psychological scars on the nation are palpable.

The emotional toll is especially elevated given the mass displacement and continuing aggression on the northern border with Lebanon. Approximately 200,000 individuals bear the brunt of displacement, a result of terrorists setting homes on fire in the communities and Kibbutzim on the Gaza border and relentless missiles targeting civilians in the southern and northern regions. As people are reconciling the horrors they faced, they are required to rehabilitate away from their homes.

One hundred twenty-nine hostages remain captive in Gaza. Every day that passes without their release places them in danger. Many of the hostages, young and old, are dependent on medicine, and there is no confirmation it is provided to them. Families and communities are tirelessly working for their release. Those who have returned face the daunting task of rehabilitation from the horrors and hunger endured during captivity. In an earlier stage, the Israeli Defence Force was successful in freeing one of the hostages in a military operation. Unfortunately, a more recent incident led to the death of three of the hostages. The anxiety for the safety of those still held captive looms large across the population.

Relentless missile strikes disrupt daily life for ten weeks. Hamas’s war tactic is indiscriminate; they continue to disrupt life and work across the entire country daily by launching missiles toward all areas of Israel, with the support of Hezbollah in the north. Even the southernmost city of Eilat faces occasional disruptions from missiles launched from Yemen, showcasing the widespread impact of the conflict.

An economic fallout is grappling as hundreds of thousands are left without income. In all industries, job loss, firings, and long-term unpaid leaves have become commonplace, plunging many into financial uncertainty.

The global escalation of antisemitism is a real concern for all Jews, especially Israeli Jews. As we are watching how Jewish communities worldwide grapple with an alarming surge in antisemitism, we are deeply worried about the incapacity of the world to stand by the rights of Israel to defend itself and the right of Israelis to live without fear of being so inhumanly targeted by terror. The international community’s reluctance to condemn the inhumane acts, sympathize with our victims and address Hamas as the terror organization it is, is disheartening, worrying, and revolting. Hamas is the new ISIS, and we demand the world acknowledge it out loud.

Internally, the sense of voluntarism amidst the adversity is heartwarming. Amid the bleakness, the spirit of voluntarism emerged across social sectors. Initiatives supporting the families of the hostages, displaced individuals, aiding terror attack victims, assisting soldiers on duty, small businesses, farmers whose’ fields have been abandoned, and helping those left without income showcase the resilience of the Israeli spirit in the face of adversity. The Israeli society once again proves its unity and social spirit in elevating those in need.

Public Sector Struggles: Overwhelmed and Exhausted

The entire public sector is under significant burdens with new workload, displacement of communities leading to fewer facilities accommodating the entire population, and personnel suffering from exhaustion and burnout. Public services are compromised, but they work tirelessly to provide the services to those in need.

The public mental health system, which has been defunded for years, finds itself exhausted and overwhelmed. A lack of appropriate planning and an inadequate number of social workers and other professionals exacerbate the challenges in responding to the needs of families and individuals in distress. A recent research published by Forum Arlozorov shows that the health system lacks 27.1 billion shekels annually to reach the average OECD expense. Similarly, Israel is 5.4 billion shekels behind OECD average expense on welfare services.

The education system grapples with several strains. After weeks, it has not operated in person, and many schools are now forced to accommodate additional students – the displaced children. Temporary schooling facilities emerge to cater to larger clusters of resettled communities. Teachers facing students with heightened anxiety are required to provide more attentive and attuned mental health care.

Hospital personnel, including doctors and nurses, face unprecedented challenges as well. Tasked with receiving hostages, they assess both physical and mental health, providing care in an environment they never imagined they would have to navigate and respond to the grave needs of the returned hostages and their families.

Private Sector Woes: Industries in Limbo

The private sector is also under strain, with many workers on reserve duty and away from work for the last ten weeks, a significant reduction of the foreign workforce, and a significant reduction of Palestinian workers, leaving many industries at a halt. Tens of thousands of foreign workers fled the country to their homes as they felt unsafe.

The day before Hamas’s abhorrent terror attack, there were 20,000 Gazan Palestinians working in Israel, entering and returning to Gaza daily. The construction industry is lacking about 90,000 workers, also counting Palestinians from the West Bank. It remains almost a complete halt, with the ongoing conflict impeding progress.  About 8,000 Palestinian workers from the West Bank continue to work in industries in Israel. In total, that is less than 10% of workers prior to Hamas’s attack.

The agriculture sector faces a severe workforce shortage. Previously being heavily reliant on foreign workers from Thailand, it is now redirecting. Voluntary initiatives support farmers, but the ongoing conflict and missile threats compromise production capacities. New foreign workers are arriving slowly, but the industry is yet to recover.

In the hospitality sector, the impact is of a different nature. While it was hit by a decline in incoming guests due to the war, it has taken on the responsibility of shouldering the national effort to shelter most of the 200,000 displaced persons. Hotels, particularly in Eilat, the Dead Sea, Tiberias, and Tel Aviv, adapted their services to accommodate those residing in their facilities for the foreseeable future. Those used to provide a ‘home away from home’ are attentively servicing people who are in need of a different kind of healing.

Workers in the platform economy return without additional compensation for heightened danger as the nature of their work entails no consistent proximity to bomb shelters as they carry out their work.

Even in the news corporations, work has changed dramatically. Initially operating almost 24/7 in broadcasting news of the attack and the initial response stages, we only now see a reduction in war-related coverage. Reporters, cameramen, and all those involved in the media industry continue to work in high demand.

Workers in many other industries had to readjust to new demands and new constraints related to the lack of employees, continuous missile attacks, and changing situations.

Histadrut’s Response: A Beacon of Support

Amidst the multifaceted challenges, the Histadrut continues to lead workers’ rights efforts through initiatives, advocacy, negotiations with the government, and the core work of the union – organizing workers.

Since the first week of the war, the Histadrut opened its facilities to provide housing for displaced families, offering a sanctuary for those grappling with the harsh realities of the terror they experienced and displacement.

Recognizing the evolving needs of the workforce, the Histadrut readjusted its workers’ rights hotline. This hotline addresses a spectrum of needs, from housing and emotional support to responding to emerging work rights challenges arising from the ongoing conflict.

In the agriculture sector, the Histadrut assisted in coordinating thousands of groups of volunteers in fields and packing plants across the country.  

The Histadrut unions continue to work tirelessly with the public and private sectors to secure new agreements and additional benefits for workers providing essential services. This ensures that workers in social, health, educational, and basic services are compensated for the additional burdens placed on them during these challenging times.

To address the increasing numbers of people left with no income, the Chairman of the Histadrut, along with the organization’s leadership, maintains close contact with different government departments. This advocacy allowed the Histadrut to effectively push for a compensation framework that addresses the needs of individuals placed on unpaid leave, providing a safety net for those facing financial uncertainty.

Na’amat, and the International Relations Division lead international campaigns and advocacy efforts to ensure the world is exposed to the indiscriminate terror and the inhumane attacks Hamas launched against women and men, young and old.

Arnon Bar-David, Histadrut Chairman, proactively supports the hostages’ families and their organization; he repeatedly stated that the Histadrut will support them however it can. The small icon on the bottom-right of this page is a clock counting the time our hostages remain in captivity.

In a time of unparalleled adversity, the Histadrut stands as a unifying force, actively contributing to Israel’s resilience in the face of multifaceted challenges ten weeks into the war against Hamas.