Who will stand by the machine? The crisis paralyzing production lines in Israel

In the not-so-distant past, Israeli workers proudly stood by production lines, feeling they were contributing to the nation's building. As the state matured and economic conditions improved, Palestinian workers took their place, as Israelis moved away from manual labor. After October 7, when the entry of Palestinians into Israel was banned, the labor shortage became acute, and the state began importing workers from India, Sri Lanka, and the Philippines.

However, foreign worker quotas for industry fail to meet even a fraction of the demand. Recently, hundreds of companies across the country were notified that they would not receive their requested quotas, or would receive only minimal amounts, due to the priority given to defense industries.

In the latest allocation round, only about 3,000 foreign workers were made available to the industry, against requests for 60,000 to 70,000. Behind these figures are factories with idle machines and unfulfilled orders.

"The allocation process concluded in June," says Shir Sela, CEO of Global Bridge. "The industry requested up to 70,000 workers, but only 3,000 were allocated. We had 37 companies receive zero workers, and out of the thousand we requested, we received only 50, even for giants like Ashtrom and Ready Mix. Prioritizing defense industries sounds logical, but it ignores that many civilian businesses, such as bakeries or vehicle body manufacturers, are secondary suppliers to the security system."

According to 2026 data, the total quota for the industrial sector is 21,200 workers, including 3,600 for Atarot via a separate track for Palestinians. However, the path from government policy to a worker standing at a machine is hindered by a complex permit system, which employers identify as a major bottleneck.

"The Prime Minister promised to increase the number of foreign workers to 50,000, with 18,200 for industry. Over 15,000 have arrived, but it is not enough. The committee responsible for approvals meets too rarely. The Attorney General opposes increasing quotas due to human trafficking concerns, even though these workers earn between 50% and 110% of the average national wage, with the simplest production line worker earning 6,000 NIS," Sela explains.

The Ministry of Economy stated in response: "The policy for distributing quotas is determined exclusively by the Directors-General Committee. The last allocation of 3,000 workers was intended to support defense efforts. The Ministry is well aware of the distress in the manufacturing sector and, through continuous advocacy, has secured quotas for over 20,000 foreign workers. We will continue to fight for increased quotas and comprehensive solutions for all sectors under our responsibility."