Losing the North: Damage from Hezbollah slams employment, industry

Smoke billows over northern Israel after rockets were fired from Lebanon, amid ongoing cross-border hostilities between Hezbollah and Israeli forces, by Israel

Months of rocket and drone attacks and the escalation in Israel’s North, which have led to the evacuation of all residents living up to 3.5 km. from the border, could have a lasting impact on employment in the area, which could drive and keep people away even after the war, according to Inbar Bezek, former MK and current CEO of the Galilee Economic Company.

The conflict in the North has severely damaged four of the industries that employ a significant portion of the area’s residents: tourism, construction, agriculture, and traditional industry.

Major challenges ahead

Bezek noted that industry employs around 20% of the area’s residents, with many factories in the North being partially or fully owned by foreigners. This means many may leave, taking jobs away, she explained. “When the owners are not Israeli, they start asking themselves, ‘Why do I need this headache?’” she said, adding that some factories are already exploring options to relocate. In the better case, they will stay in Israel, but in the worse case, many may leave the country.

These companies and factories are facing three significant challenges: Many of their workers are evacuated and therefore not working; suppliers are having a hard time delivering raw materials to factories near the border; and many workers are not showing up for work in areas where they do not feel safe, even if they have not been formally evacuated.

Inbar Bezek (credit: Nathan Yaakobovitz)

Inbar Bezek (credit: Nathan Yaakobovitz)

This problem is exacerbated by the government’s treatment of the evacuation line as the compensation line, said Bezek. “The Defense Ministry decided to evacuate people up until 3.5 kilometers from the border, so the finance ministry said, ‘OK, I will compensate whoever was evacuated, and for whoever was not evacuated, it is business as usual.’”

“It is a mistake to look at it this way,” she said, offering, for example, the situation in which an employee lives five kilometers from the border but is employed in an evacuated town where businesses are shuttered.

“As far as the state is concerned, you aren’t eligible for anything, but your workplace is closed,” said Bezek, explaining that these workers were offered unemployment benefits in the framework of unpaid leave, a solution offered to all Israelis during the war, with no special solution for residents of the North.

The opposite problem is also true, as Bezek explained, saying that for companies that are not located in evacuated areas but employ many people who have been evacuated, it is difficult to keep their businesses running. Bezek stated that while the government cannot fire these evacuees, it has yet to compensate the companies that employ them and continue to pay their wages.

THIS IS not the only government funding that has been late in coming, said Bezek. Grants that were meant to help cover the months of January and February were dealt with in May, and grants for March and April were discussed in the Knesset in June, she said.

“I hear heartbreaking stories,” she continued, mentioning, for example, a widowed mother with a small business who told her that the grants she gets go right into the minus in her bank account and that her account has almost been closed a number of times.

Bezek’s understanding is that these late payments are because the finance minister (delete who) wants to prevent businesses from understanding the criteria and then “cheating” or “playing the system.”

“This is nonsense, because logically speaking, the criteria [for who is eligible] will not be changed each month,” she said, adding that the government needs to give people the security and peace of mind that they will be taken care of when their employment or business is hurt by the war.

Businesses situated up to 9 km. from the border received some financial help, but individuals outside of the evacuation zone did not, and many businesses just outside the 9 km. areas are unable to function due to the war, said Bezek.

For example, she mentioned a rafting business located on the Jordan River, some 11 kilometers away from the border, but now, during the war, no one goes rafting that far north.

It’s critical to support employment in Israel’s North, especially high-quality employment, to ensure that young people and stronger populations stay in the region, she said.

DUE IN part to the incredibly diverse climate in the area, which enables research, the North has the potential to become a hub for food and agrotech, said Bezek, saying that much has been invested in this area in the past eight years.

After October 7, however, over 90% of the 81 food and agrotech companies have left the area, she said. If these companies do not return or are not replaced by tech companies or others offering quality jobs, the North will be cast 10 years back in terms of employment options and attractiveness to young people, she explained.

Polls have shown that some 40% of those evacuated are considering not returning to the North, said Bezek, adding that those who do not return are likely those with the option to relocate, leaving socioeconomically weaker populations in the North and exacerbating existing inequality.

The North and its well-being are central to Israel, Bezek said. “The fields of Metulla that separate the town’s houses from Lebanon; the fields of Misgav Am that separate the border from the houses – they are the border.”