The ongoing, genocidal Israeli war on Gaza has been detrimental to the lives and livelihoods of Palestinians both in the Gaza Strip and the West Bank. In Gaza, the daily massacres, starvation, continuous displacement of the population, destruction of infrastructure, and means of production have made it impossible to sustain life.
In the West Bank, Israel’s settler-colonial measures have had devastating economic repercussions, particularly for workers. These measures include the imposition of movement restrictions in the form of checkpoints and roadblocks (849, by the United Nations Office for the Coordination of Humanitarian Affairs’ February 2025 count),Footnote 1 frequent military incursions into Palestinian areas; the revocation of Palestinians’ permits to work in Israel; and the continued withholding of the Palestinian Authority’s customs revenue. These measures, along with the intensification of settlers’ attacks on Palestinian lives and livelihoods across the West Bank,Footnote 2 the destruction of the Jenin, Tulkarem, and Nour Shams refugee camps,Footnote 3 and a new wave of settlement construction throughout Area C and rural areas, have further exacerbated the disastrous situation. As a result, the West Bank’s economy has faced significant contraction, as evidenced by a sharp decline in gross domestic product,Footnote 4 reduced production, and rising poverty rates.
Well before the current genocide in Gaza, the Palestinian economy was functioning under severe constraints. This arose primarily from structural distortions in various economic sectors as a result of measures imposed by the Israeli occupation since 1967. These measures barred Palestinian control over vital domains, such as borders, natural resources, land zoning, and economic policy tools, including monetary and fiscal instruments. The West Bank has remained separated from the Gaza Strip for over twenty years now, the latter having endured a tight siege since 2006. As a result, for nearly six decades now, the Palestinian economy’s productive base has severely contracted with grave repercussions for laborers. Reliance on services has notably increased, while the contributions of agriculture and manufacturing to Gross Domestic Product (GDP) have all declined. The combined share of agriculture and manufacturing to GDP declined from 34 percent in 1994 to 18 percent in 2022. In parallel, the share of services, trade, transportation, and public administration rose from 60 percent in 1994 to 77.5 percent in 2022Footnote 5. This contraction in the economy’s productive capacity was coupled with further reliance on external sources for economic growth, including remittances from Palestinian workers in the Israeli labor market as well as external aid provided by the international community. This meant that whenever Israel wanted to bring the Palestinian economy to its knees, it prohibited the entry of Palestinian workers to its economy through closures or movement restrictions. International aid was provided with the priorities of the donating countries in mind rather than the Palestinian needs. As Friedrich and Luethold explain, foreign donors retained strong control over local aid disbursement. In 2006, the European Union (EU)—at that time the largest donor to the Palestinian National Authority (PNA)—decided to bypass the PNA and disburse funds directly to Palestinian recipients, provided that they meet a set of requirements imposed by the EU. These changes allowed the EU and other donors to quickly redirect or modify funding in the event of unwelcome political developments.Footnote 6 Thus, aid furthered the interests of donor countries at the expense of Palestinian choices.
All the above-noted factors compounded to gradually weaken the Palestinian economy as part of the process of elimination against the native Palestinians exercised by Israel since 1967, culminating in the Gaza genocide. This paper provides a brief conceptual framework for understanding the impact of the current war on West Bank workers and assesses how Israel’s genocide has affected these workers across multiple indicators.
Conceptualizing labor markets under settler-colonialism
Understanding Palestinian labor markets and workers’ experiences under Israeli colonialism requires a settler-colonial framework. Patrick Wolfe’s notion of settler-colonialism’s “logic of elimination of the natives” elucidates how settler-colonialism systematically undermines the colonized, particularly workers.Footnote 7 As Wolfe argues, “The logic of elimination not only refers to the summary liquidation of Indigenous people, though it includes that… elimination is an organizing principle of settler-colonial society rather than a one-off occurrence….”Footnote 8 Thus, Wolfe’s notion of elimination highlights settler-colonialism as a structure and process that systematically seeks to erase the native over time and across economic, social and political dimensions and can include a variety of strategies, some more violent than others. Therefore, Israel’s genocidal war on Gaza—including its impact on the West Bank—can be understood as one part of a long process of elimination of the Palestinians that commenced in 1948. The ongoing destruction of the Palestinian economy by Israel since 1967, the imposed contraction of its productive base, the use of Palestinian workers’ access to the Israeli economy to subdue the Palestinians and the destruction of sources of employment for the Palestinians within their local economy as a result of Israel’s measures are all part and parcel of the process of elimination of the Palestinians.
In addition to framing the economic repercussions of Israel’s genocidal war within a settler-colonial paradigm, standard classical theoretical and empirical literature provides further insights into the potential repercussions of so-called conflict—a term that often sanitizes conditions of aggression, war, and genocide—on workers. Wars have both short-term and long-term impacts on workers.Footnote 9 In the short term, wars may destabilize the labor supply, which, combined with a decline in demand for work, may lead to high unemployment rates, a decline in wage levels, and reduced working hours brought about by the obstruction of mobility across sectors. In the long-term, impacts include increased informality, sectoral shifts by workers, changes in worker productivity levels, and the deterioration of labor standards—all potentially resulting in lower standards of living for workers’ households and society at large.
Impact of the war on Gaza on West Bank workers
Well before the war on Gaza began, the Palestinian economy was constrained by Israel’s colonial measures, which led to long-term structural distortions, including a dwindling productive base and reliance on services, with reduced contribution of agriculture and manufacturing to both GDP and employment. As a result, the Palestinian economy has exhibited severe instability and dependency on the Israeli economy.Footnote 10
Just before the war on Gaza started in October 2023, the West Bank labor market engaged 1.1 million workers (see Table 1). Men’s participation rates were comparable to those in other regions around the world, while female labor force participation rates have historically been low. As other scholars and I have argued, the paradox of women’s high levels of education and low rates of labor force participation is associated with Israel’s colonial measures.Footnote 11
Table 1. Labor market indicators in the West Bank, September 2023, compared to March 2025
Note: Palestinian Central Bureau of Statistics (PCBS), Labor Force Quarterly Surveys—Press Releases, November 2023 and May 2025.
At the same time, unemployment rates were around 13 percent, though much higher for women compared to men. Employment was skewed towards services, with the vast majority of workers located in waged employment. Around one-fifth of West Bank workers accessed waged employment within the Israeli labor market and settlements, who are predominantly men.
Following the war on Gaza, Israel’s colonial measures intensified in the West Bank, leading to disruptions to supply and value chain networks both locally and with the rest of the world, limits on workers’ capacity to access workplaces through movement restrictions, as well as the arrest and detention of workers on the move within the West Bank.
Consequently, the immediate and most obvious impact on workers in the West Bank has been the contraction of the labor supply and loss of employment for many workers. Nearly 7700 workers, predominantly men, have withdrawn from the labor market, which might be indicative of a discouraged worker effect as workers experience long periods of unemployment and lose hope of finding any form of work.
Unemployment rates also soared to very high levels (30.2 percent): 171,000 workers who previously worked in Israel and the settlements lost their jobs, combined with employment losses in the private sector of the West Bank. Nearly 22 months after the war on Gaza, only 40,300 Palestinian laborers work in Israel and the settlements, while unemployment rates remain extremely high compared to the pre-war period.
The rise in unemployment rates is unprecedented—even relative to the persistently high unemployment rates during the past politically turbulent fifty-seven years of colonization. These rising unemployment levels have exerted downward pressure on local daily wages, with Palestinian Central Bureau of Statistics (PCBS) data indicating a 20 percent decline in average daily wages since October 2023. This decline is mainly the result of restricting Palestinian workers from employment in Israel and the settlements. The International Labor Organisation (ILO) and PCBS have estimated daily labor income losses at 21.7 million USD per day.Footnote 12
But the depletion of Palestinian workers’ income extends beyond job losses alone. Israel’s decision to withhold the Palestinian National Authority’s customs duties has impaired the PA’s capacity to fulfill its financial obligations towards public sector workers. As a result, although the public sector has not experienced job losses, civil servants have only received partial payments not exceeding 70 percent of their wages. In some months, civil servants were not paid at all. At the same time, private sector workers have suffered job losses as a result of the rise in the number and intensity of movement restrictions, limiting their ability to get to work. These restrictions have also increased transaction costs for businesses, leading to production reductions and thus reducing employment. Many businesses have also reduced work hours in order to avoid redundancies, meaning that private sector wages have also declined.
The war has also altered the sectoral employment structure in the West Bank. The structure of the West Bank labor market has always been skewed towards services, reflecting decades of erosion of the economy’s productive capacity. The war on Gaza has deepened this trend: the loss of employment in the construction sector as a result of closure of the Israeli labor market has led to a rise in the share of employment in services. In other words, the structure of employment has become even more distorted, with the vast majority of laborers competing over meager resources in the vulnerable services sector. As a result, workers’ rights have become even more precarious, as indicated by the decline in stable long-term work contracts, as well as in the reduction in full-time work and rise in part-time employment (see Table 1).
Informality has also deepened in the West Bank economy since October 2023, as the labor market shifted from regular employment to petty self-employment. As the Palestinian Central Bureau of Statistics (PCBS) data indicate, most workers who lost their jobs have either taken up self-employment or become unpaid family workers within the services sector. An International Labor Organization (ILO) survey conducted in 2024 shows that newly self-employed workers focus on petty peddling (e.g., fast food stalls, vegetable and fruit side-road trucks) for men, and home kitchens and embroidery or knitting activities for women. These forms of work involve limited earnings at the subsistence level with precarious work conditions. Competition over these limited markets is intense.Footnote 13
Due to job losses and reductions in work hours—resulting ultimately from Israeli colonial measures—87 percent of workers taking part in an ILO survey in 2024 indicated that their household income had declined since October 2023. Only 11 percent of surveyed workers’ households have managed to maintain their pre-war income levels. As a result, workers’ families have relied heavily on cutting back expenses to cope with job losses and declining incomes, impacting their well-being and quality of life. Among surveyed workers’ households, entertainment expenditures—known for their elasticity to income fluctuations—have nearly vanished. Additionally, families have reduced their expenditure on essentials, including food, healthcare, and education. To weather the economic downturn, a significant majority have relied on their personal savings (71 percent), postponed loan payments (49 percent), and sold financial assets (27 percent).
In conclusion, Israeli measures introduced in the West Bank following the genocidal war on Gaza have had grave repercussions for workers. Access to jobs as well as wages has been compromised, leading to high unemployment rates and a decline in incomes. Yet more structural repercussions have also taken place in terms of the redistribution of workers across sectors and further informalization of the labor market. This has had a visible negative impact on workers’ families and their capacity to meet basic needs.
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