Zionist Union Knesset member Itzik Shmuli said Tuesday he would call an urgent hearing of the Knesset’s Labor, Welfare and Health Committee to discuss debt bondage among foreign workers, following an exposé on the phenomenon.
Shmuli’s announcement came in response to a recent Times of Israel report describing the illegal but rampant practice of charging foreign workers anywhere from $8,000 to more than $20,000 for the right to come work in the country. Experts claimed that most of this money is transferred to Israeli manpower companies through illegal and clandestine channels. Caregivers in Israel often spend the first 1-2 years in the country servicing their debt, and will tolerate substandard and even abusive working conditions for fear of losing their jobs while in debt to loan sharks abroad.
“The findings in this article are exceedingly troubling,” Shmuli said in a statement, “and significant in two respects. First, there is the ethical issue, where manpower companies turn caregiving — an essential service to the elderly people who need it — into a kind of human trafficking. Then there is the legal issue, when these things occur in a concealed and secret way. It is my intention to initiate an urgent hearing on this matter in the Knesset Labor, Welfare and Health Committee and to invite all the relevant parties to discuss this troubling phenomenon.”
Shmuli is a member of the committee as well as chairman of the Pensioners’ Lobby.
Joint (Arab) List MK Dr. Dov Khenin also reacted with concern to the exposé.
“The situation depicted in the article is very troubling,” he said. “We must not accept a situation where non-local workers pay exorbitant amounts in brokers’ fees for the ability to work in Israel. These work brokers are parasitic entities, and we must promote international cooperation to combat this phenomenon, which has harsh repercussions for workers, their working conditions, and for Israeli society that allows these things to take place.”
Barak Ben-Ezer, co-founder of a startup called Neema, which provides digital banking services to foreign workers, contacted The Times of Israel following publication of the article to emphasize that not only are caregivers paying high brokers’ fees, but the interest on the loans they take to pay these fees can be 5-10 percent a month. Ben-Ezer said that these figures emerged from questionnaires he gave workers interested in his service.
Neema, he said, allows workers to send money home instantly for just a 1% fee. In the future, he said, Neema could provide workers with the loan at a much lower interest rate than the loan sharks, although his startup cannot eliminate the basic problem that illegal brokers’ fees are being charged in the first place.
“At 7% annually, it is simply too risky to lend to migrant workers, given default rates and lack of recourse,” he said, but Neema uses big data to determine which workers are a credit risk, thus lowering interest rates for everyone else.