Foreign workforce doubles to 230,000 as it spreads across new industries

Unchecked foreign labour expansion threatens Israel’s labour market in the long run

Israel is experiencing one of its most dramatic labour‑market upheavals in decades. Since October 7, the halt in Palestinian labour entry has driven the government to bring in increasing numbers of foreign workers, expanding into more and more sectors. The Histadrut warns that this rapid shift could have long‑lasting consequences for Israel’s economy and its workforce.

Speaking at Eilat Conference on Labour, Rom Dvir, Chair of the Histadrut’s Union for Hotel, Agriculture, and Chemical Workers, who led a panel on the issue, put it bluntly: the war “shattered the Israeli labour market.” With the construction, agriculture, and hotel sectors abruptly cut off from their traditional workforce, the government opened the gates to accelerated foreign recruitment. The result is unprecedented: Israel now employs 230,000 foreign workers, double the number before the war.

For the Histadrut, the question is no longer whether foreign labour was necessary in the immediate aftermath of the crisis. It is whether the sudden, largely unregulated expansion risks becoming a permanent fixture of the economy—and whether Israelis will ultimately shoulder the cost.

Data, not demand: Histadrut pushes for responsible quota setting

Evyatar Hanan, the Histadrut’s Head of Policy and Strategy, warns that what began as an emergency measure has quickly evolved into a structural shift carried out with minimal analysis and insufficient oversight. “We understood the need at the beginning of the war,” he said. “But as the war drags on, we are seeing foreign workers entering sectors that never previously depended on Palestinian nor on foreign labour.”

One clear example is the transport sector, which is now seeing proposals to bring in foreign drivers. Hanan warns that this move could suppress wages and undercut local employment at a time when thousands of Israelis are actively looking for work.

To counter this, the Histadrut is using every tool at its disposal to rebuild and stabilise the transport workforce. In just the past two months, new collective agreements have delivered markedly improved conditions aimed at boosting retention; A new agreement for Tel Aviv light‑rail workers secured salary increases of up to 23% and broad improvements in working conditions. Additionally, a first‑ever collective agreement for Egged Golan drivers established a minimum hourly wage of 54 shekels, 57% above the national minimum. These efforts are part of a coordinated strategy to strengthen job quality, improve retention, and rebuild a robust local workforce; ensuring employers cannot simply claim that foreign recruitment is the only solution.

But Hanan raises a fundamental concern: how can employers be expected to share profits fairly with workers if they are simultaneously allowed to import labour at lower wages and weaker conditions? He stressed that the government’s role cannot be limited to approving foreign‑worker quotas; it must also invest in creating the conditions that encourage more Israelis to enter these professions. That means raising salaries, establishing new standards for labour conditions, and building professional pathways that make these jobs viable and attractive. Allowing foreign labour to fill the gaps, he argued, cannot be the only solution. Quotas should expand only when an objective labour shortage exists, demonstrated through evidence such as unfilled vacancies, failed recruitment efforts, and wage‑growth data.

Research by the Ministry of Finance’s Chief Economist supports this approach, finding no macro‑level labour shortage except in the construction industry, and noting that if shortages were widespread, real wages would be rising – not stagnating.

Protecting workers: Enforcement gaps and the ethical imperative

Meir David, Head of the Enforcement and Regulation Division at the Ministry of Labour, who participated in the panel, admitted that the authorities are aware of employers who violate basic legal standards of foreign workers. They know that some are compelled to work beyond the 12‑hour daily limit. They are aware of employees who do not receive the wages they are entitled to by law. And they are aware that some are housed in conditions that fall far below legal requirements. But the capacity of his office to monitor and enforce the law is currently limited, with a low level of staff recruited to enforcement roles.

In response, panel moderator Dvir, stressed that Israel’s approach to foreign labour must reflect our fundamental values to ensure fair conditions for those who come here to work. Policymakers and employers alike must be honest about the true investment required, not only in foreign workers’ employment rights, but also in their living conditions, and wellbeing outside of work.

From his perspective, Eyal Hannenberg, Vice President of Human Resources at the Israel Hotel Association, explained that the industry is doing everything it can to make foreign workers feel welcomed and supported, both professionally and personally. He stressed that at the hotels’ industry, employers do their best to treat them with respect and invest in their wellbeing. Yet even with more workers arriving every day, the sector continues to face a significant and persistent labour shortage.

Israel cannot afford to drift into long‑term dependency on foreign labour based on decisions made under wartime pressure. Responsible quota management, data‑driven policy, investment in domestic labour, and a fair approach to the rights of foreign workers already in the country are all essential to building a fair, effective, and inclusive workforce.

Some of the information in this article is based on Davar’s reporting.