Due to high unemployment rates in the West Bank, tens of thousands of Palestinians work in Israeli settlements. According to the Manufacturers Association of Israel, some 22,000 Palestinians are employed by settlement businesses in construction, agriculture, manufacturing and service industries. In 2010, Palestinian leaders announced a ban prohibiting Palestinian laborers from working in Israeli settlements. The ban triggered anger and uncertainty among West Bank Palestinians who depend on this employment. Labour leaders warned the PA against taking legal steps against those who continue to work in the settlements. The prospect of losing Palestinian labour has forced farms in the Jordan valley to consider bringing in more workers from East Asia. A columnist for The Jerusalem Post claimed that the ban would not undermine the economic viability of the settlements.
Palestinian officials estimate that settlers sell goods worth some $500 million to the Palestinian market. In 2009, the UK Department for the Environment, Food and Rural Affairs called for labeling products produced by the settlements sold in UK markets.
Palestinians have been highly involved in the construction business since the settlements first started appearing in the West Bank. The Palestinian Authority estimates over 12,000 Palestinians are employed by Jewish and Arab contractors in building and expanding settlements. It is reported that even supporters of Hamas and Islamic Jihad work in the settlement business.[citation needed] A lack of jobs and relatively high salary has been cited as a motivation for Palestinian involvement. Arab workers are said to be paid approximately 3 times as much by Israeli contractors than Palestinian employers. Jewish employers pay an average of NIS 400 ($100 US$) while Palestinian contractors pay NIS 100 to NIS 150 per day.
According to a 2008 annual report by Kav LaOved, many Palestinians who work in Israeli settlements are not granted the same basic protections that apply to Israeli workers under Israeli labor law, such as a minimum wage, payment for working overtime, work safety and social benefits. Instead, they are employed under Jordanian labor law, which does not require minimum wage, payment for overtime and other social rights. In 2007, this system was legally challenged by Kav LaOved and the Supreme Court of Israel ruled that Israeli labor law does apply to Palestinians working in West Bank settlements. The court stated that applying different rules in the same work place based on differing nationalities constituted discrimination. The ruling allowed Palestinian workers to file lawsuits in Israeli courts, which led to an average settlement of 100,000 shekels.
According to Palestinian Center for Policy and Survey Research, 63% of Palestinians oppose PA plans to prosecute Palestinians who work in the settlements. However, 72% of Palestinians support a boycott of the products they sell
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