Israel’s Economy Is Thriving. Many Israelis Are Not.

The high-tech sector driving the headline numbers is small. It employs only about one in nine Israeli workers, pays them close to three times the average wage in the rest of the economy, and earns most of its revenue from customers abroad, who keep paying when the sirens sound. The other eight out of nine Israeli workers make their living in shops, farms, and one-person businesses that depend on local customers, the ones who stay home and lose a day’s income every time the fighting flares up. Those Israelis have borne much of the toll of the war.

For the ordinary economy, the strain rarely looked like a crash. More than two years into the war that began in Oct. 2023, about half of Israel’s self-employed report earning less than they did before the war, according to a survey by the Israel Democracy Institute. 

Consider Adi Degani, a small business owner, who taught kite surfing at Poleg Beach and on the Sea of Galilee. A reservist, he left his business and answered the call for active military duty during the war, serving for over 400 days, and leaving his business in debt. He took a bank loan to stay afloat and now works in construction. Israel gained enormously from his service, and he carries much of the burden alone.