The recent Knesset debate over expanding foreign worker quotas has reignited a familiar public discussion. Critics argue that the system lacks proper planning and oversight, that foreign workers are replacing Israelis, and that their numbers have grown out of proportion, even though they remain lower than many assume.
Yet it is important to state the reality clearly and unequivocally: the Israeli economy, in its current form, simply cannot function without foreign workers. Not in construction, not in agriculture, not in caregiving, not in manufacturing, and certainly not in commerce and retail.
Since October 7, Israel has been forced to confront one of the most severe labor shortages in its history. In the construction sector alone, tens of thousands of workers disappeared almost overnight. Construction sites were frozen, projects stalled, costs soared, and large parts of the economy slowed dramatically.
Faced with this unprecedented gap, the government did what any responsible country would have done: it opened the door to foreign workers. This was not driven by ideology but by necessity.
As is often the case in Israel, however, a policy designed to prevent economic collapse quickly became the focus of political and public criticism. Instead of asking how to regulate the sector more effectively, the familiar claims resurfaced: that the government has “lost control,” and that foreign workers are displacing Israeli employees.
These arguments may resonate in television studios, but they fall apart when confronted with reality.
After all, the experiment has already been conducted. For years, the government tried to attract Israelis to physically demanding jobs through higher wages, grants, and financial incentives. It did not work.
Even generous bonuses worth tens of thousands of shekels failed to bring Israelis to construction sites, manufacturing plants, warehouses, or logistics centers in meaningful numbers. In many cases, only a handful of positions were filled.
Contrary to popular belief, this is not about unwillingness to work. It reflects a fundamental shift in the structure of the Israeli economy. An entire generation has grown up in an economy that rewards careers in technology, services, management, and the professions. This is no longer a moral debate. It is an economic reality.
For years, many businesses also relied on undocumented foreign workers who remained in Israel illegally and were employed through manpower agencies. Employers faced substantial fines and, in some cases, criminal charges, effectively becoming offenders simply because they could not find enough workers to keep supermarkets and other essential businesses operating.
The labor shortage has always existed. The difference today is that the issue is finally being addressed through a legal and regulated framework that also benefits the state.
A major source of government revenue
There is another reality that many people may find uncomfortable, but one that deserves recognition.
For decades, Israel relied heavily on Palestinian workers. The arrangement was convenient, cost-effective, and geographically close. October 7 fundamentally changed that assumption.
Entire industries, including manufacturing lines and critical infrastructure that support essential and defense-related sectors, depended on a workforce that could disappear overnight because of security circumstances.
This leads to a point that is often overlooked: foreign workers are not merely a solution to labor shortages. They are also a significant source of government revenue. Fees, levies, licensing requirements, guarantees, and tax payments generate hundreds of millions of shekels for the state every year.
In fact, licensing fees paid by construction corporations alone, which continue to recruit increasing numbers of foreign workers, generate approximately NIS 600 million annually for the government.
Foreign workers, therefore, are no longer an economic burden. They represent an industry that generates substantial public revenue while enabling the economy itself to continue functioning.
Responsible governance, not political slogans
At the same time, it is important to acknowledge that aspects of the foreign employment system still require improvement. Employment conditions must continue to be monitored, and greater attention should be paid to cases in which workers remain in Israel after their visas expire. These are legitimate challenges that deserve prompt attention.
That said, it is equally important to recognize what is already working. Israel has established quotas, licensing requirements, visa management policies, and regulatory mechanisms that enable authorities to oversee and control the employment of foreign workers. Moreover, the existing legal framework is specifically designed to prevent permanent settlement in Israel.
This is precisely why abruptly halting the employment of foreign workers could prove far more damaging to Israel’s economy than any war, pandemic, or macroeconomic challenge the country has faced in recent years.
Given the difficult conditions under which the Israeli economy has operated in recent years, it is time to acknowledge a simple truth. Foreign workers are no longer a temporary solution. They have become an integral part of Israel’s modern economy.
It may not be comfortable to admit, but Israel’s economy is not surviving despite foreign workers. It continues to function and grow because of them.
The writer is the CEO of Global Bridge.