ARAB SOCIETY AMID THE WAR: Employment and Economy

The aftermath of October 7th and the ongoing war continue to have profound impact on the mental, social, and economic well-being of both Jewish and Arab citizens in Israel. Arab society, socio-economically weak before the war, has been hit hard, raising concerns about the potential setback for progress and momentum around narrowing gaps for more than a decade. With looming cuts to Arab economic-development budgets, numerous Jewish and Arab leaders and officials are sharing their concerns that deterioration in the socio-economic status of Arab citizens has implications for Israel’s overall economic recovery, as well as for Jewish-Arab relations and efforts to promote a shared future.

The economic cost of the war and recovery budgets are only part of the issue. Unprecedented tensions and an atmosphere of mistrust between Jewish and Arab citizens have their own economic repercussions. Jewish customers avoid Arab localities and Arabs reduce spending due to lower income. Arab-owned businesses suffer due to reduced activity during the war and limited government assistance. Additionally, certain key sectors see a significant absence of Arab workers driven by fear of harassment, business closures, and instances of disciplinary actions. According to an INSS survey, two-thirds of Arabs are suffering economic hardships since the onset of the war.

This brief provides an overview of the impact of the crisis on Arab employment and economic well-being, along with a summary of some of the major initiatives aimed at mitigating these effects.