The Impact of the War on Israel’s Arab Society and the Necessary Policy Measures

The economic robustness of Israel’s Arab society is important for the growth and prosperity of the Israeli economy. Even before the war started on October 7, there were already significant economic disparities between Jewish and Arab citizens. Gaps in education and human capital have contributed to low employment rates among Arabs in comparison to Jews, and even to abandonment of the labor market and increased idleness among young Arab men. In recent years, we have begun to see some implementation of government plans aiming to reduce these gaps and promote the economic development of Arab society. The war may erase the achievements of these plans and trigger further socio-economic decline in Israel’s Arab society, which would only exacerbate the existing problems.
Analyzing data from the October 2023 Labor Force Survey conducted by the Central Bureau of Statistics (CBS) shows that in the prime working age group (25-64), Arab men have been harmed more severely than any other group. 28.9% of employed Arab men in this age group were absent from their workplace due to war-related reasons: around a third of them were absent due to furlough, and the rest were absent due to “other” reasons, which are likely to stem from the heightened tensions between Arabs and Jews. The sector with the highest absence rate is construction, as around half of Arab men employed in this sector were absent from work in October. Among Jewish men, only 8.9% of employees were absent due to furlough and “other” reasons. Among the 18-24 age group in Arab society, the absence rate (out of all employees) due to war-related reasons was even higher than in the primary working age group.
In addition to the impact of the overall damage suffered by the economy as a whole and by the economic sectors that have a high proportion of Arab workers, the increasing tension between Jews and Arabs may lead to the exclusion of Arab workers by firms and employers which operate in Jewish and mixed communities, thus reducing employment rates in Arab society, leading in turn to a widening of the economic disparities between the Arab and Jewish societies, an increase in the prevalence of violence and crime, and other deviant behaviors such as idleness among young adults and gravitation toward unscrupulous business and criminal organizations due to economic hardship.
 
In order to prevent such a deterioration, we propose a set of measures meant to preserve existing workers, invest in incentives to work among the unemployed, strengthen municipal authorities, fight crime, and promote other key issues. These measures will not only help the Arab society and Israel as a whole to emerge from the war in a better economic situation, but will also enhance the Arab society’s trust in the government and in the state’s institutions.