Introduction

In 2020, the population of the State of Israel was estimated to be almost nine million three hundred thousand citizens, of whom 17% were Arab-Palestinians. They consisted of residents who had remained in the territory of the State at the time of its establishment in 1948. Formally, these citizens enjoy full, equal civil rights, but, in practice, this is one of the most excluded groups in Israeli society in economic, cultural, social, and national terms. To date, the State of Israel has not recognized the Palestinian national identity of its Arab citizens and even makes use of that identity to justify its discrimination against this population.

Thus, it is not surprising that Israeli sociology and sociology, in general, has, until now, focused on studying the methods of discrimination imposed upon this society in order to understand it, paying particular attention to the question of its national identity and its contribution to the Israeli-Palestinian conflict (see, for example, Kimmerling, 2004; Smooha, 2017). However, this point of view, based on the paradigm of critical sociology that evolved in Israel at the beginning of the 1990s and was inspired by similar American sociological trends (Mizrachi, this issue), has completely overlooked a central trend taking place in Arab-Palestinian society in Israel – the growth of a new middle class that is made up of 34% of the Arab population. The present article presents the untold narrative of the growth of this new middle class, and will thus expand the research perspective on the Arab-Palestinian population in Israel.

The article is based upon decades of independent research (Haidar, 1993, 1995, 2005, 2009) as well as on descriptive analysis of CBS data that describes the process of the historical growth of the new Arab middle class. After describing the economic situation of the Arab population prior to the establishment of the State of Israel, we go on to describe developments in the periods from 1948 – 1966; 1967–1984; 1985 – 2000; and 2000- present. In each period, the Arab middle class grew through the encounter between discriminatory government policy, the unique characteristics of Arab-Palestinian society and the agency of its members, and their ability to exploit the existing power structure in order to accumulate capital, which was then invested in acquisition of education and/or business activity. Within a few generations, this process produced a new Arab middle class among the Arab-Palestinian population in Israel. However,, the Arab localities did not undergo similar processes of growth and change, and so the Arab middle class found itself split between a Western class identity and the rural traditional space. This issue lies at the heart of its identity and its lifestyle.

As noted, the Arab middle class constitutes approximately one-third of the Arab-Palestinian population of Israel. Its very existence and the processes that brought about its growth are an integral part of the history and socio-cultural characteristics of the Arab-Palestinian population in Israel, and the latter cannot be understood without understanding the former. Moreover, the contemporary relations between the Arab and the Jewish population of Israel are greatly influenced by the patterns of integration of the Arab middle class in higher education, the labor market, and, recently, in housing. The disregard by existing studies of this fundamental trend and characteristic of Arab-Palestinian society in Israel constitutes an essential blind spot, both empirically and theoretically, and this heightens the limitations of the critical sociological perspective. The current article proposes to break down those limitations and to expand the theoretical perspective whereby Israeli society analyzes and interprets Arab-Palestinian society in Israel.

Why and How the Arab-Palestinian Middle Class Disappeared from Israeli Sociology

A Historical Review of the Literature

Research on Arab-Palestinian society can be divided into three periods: from the establishment of the state (1948) to the 1970's, from the late 1970s to the 1990s, and from the 1990s to the present.

From the establishment of the state (1948) to the 1970's

In this first period, we see a clear division between those experts in Middle Eastern affairs who studied this population and Jewish Israeli sociologists and anthropologists who almost entirely ignored them (Khattab, 2004). Research during this period subscribed to the modernization approach, which viewed the Arab-Palestinian population as a fixed and unchanging traditional, social, cultural, and religious structure that was therefore beyond the boundaries of “modern” Israeli society. This approach, which purported to explain the non-integration of Arab-Palestinians into Israeli society, was confined to studies of the traditional social structure of the Arab village, family structure, political expression, and processes of modernization. Even when researchers did address improvement in the standard of living within Arab-Palestinian society, they completely ignored the influence of this improvement on other social developments and, in particular, on the stratification structure (see, for example, Bar, 1978; Ginat, 1976; Landau, 1971; Stendhal, 1973).

Two important exceptions to this approach had an influence on its future directions. First, anthropologist Henry Rosenfeld examined integration of the Arab workforce into the Israel market and the effect on social structure and social relations. Rosenfeld was the first researcher to discern the rise of the new middle class in Arab-Palestinian society (other than author 1); his book “They were Fallachim”Footnote 1 was the most comprehensive of his many scientific contributions (Rosenfeld, 1964). Second, Alia Zureik (1979) analyzed the status of Arab-Palestinian society as a case of internal colonialism; this generated much controversy and shook the foundations of the accepted approaches to the study of the Arab-Palestinians. Despite these important contributions, the Zionist point of view was so embedded into the national enterprise that it “converted the Palestinians into a factor of almost secondary importance” (Migdal & Kimmerling, 2003).

From the late 1970s to the 1990s

During this second, interim, period, criticism of existing approaches and of the dominant research methods in Arab-Palestinian research in Israel began to appear. This was part of a more general criticism of the study of Israeli society and rejection of the close link between the state and its institutions and social anthropological research in Israel (Kimmerling, 1995; Ram, 1993).

Researchers began to focus on specific groups and spaces, such as mixed cities and Bedouin society (Ben-David, 1993; Ben-David & Orion, 1998; Falah, 1996). Research into the economy in the Arab sector grew (Haidar, 1995; Lewin-Epstein & Semyonov, 1993; Schnell et al., 1995). In addition, housing (Hamaisi, 1990; Rosenhek, 1996), crime (Cohen, 1990), local authorities (Al-Haj & Rosenfeld, 1990), social services (), health (Rice & Blank, 1988), geography (Grossman & Rekhes, 1994), disadvantaged social groups such as children, women (Haj-Yahia, 2000) and the aged (Azaiza, 1998), legal status (Kretzmer, 1987), and other previously-neglected areas of study began to receive attention.

From the 1990s to the present

By the mid-1990s, the study of Arab-Palestinian society had become more established and inter-disciplinary, based largely on critical theory and concomitant with the growth of the critical position in Israeli research (Ram, 1993). Research on Arab-Palestinian society was now focused on its position within the social structure of the State of Israel, and in particular on the power relations between the majority and the minority. As such, it was based on the assumption that the status of Arab-Palestinians in Israel can only be understood through a study of Israeli society (Yiftachel, 1995, 1996, 2000).

However, this assumption led researchers to ignore the processes of internal class segregation and the growth of the Arab-Palestinian middle class. For example, Smooha, one of the most prominent sociologists of Jewish–Arab relations, never addressed the question of changes within Arab society except for the process of politicization (1976, 1980; 2017). Rabinowitz (1993) dealt with the imposition of formal mechanisms intended to preserve the marginal position of the Palestinian minority in Israel; however, other than attending to generation changes in political awareness, he also ignored internal changes in the stratification structure of Arab-Palestinian society (Rabinowitz & Abu-Baker, 2002). Furthermore, he asserted that the differences in the positions of Israeli anthropologists about the Palestinians reflected changes in Israeli self-perception and in the intellectual world in Israel and not changes in Palestinian society per se (Rabinowitz, 1998).

In a similar vein, Carmi and Rosenfeld (1992) noted the use the Jewish majority made of various economic means in order to exclude the Palestinian population from areas of agricultural production and marketing, thus preventing them from using their own manpower resources more efficiently. This laid the foundation for an economy that is divided between the upper class and the lower class on the basis of nationality. However, they also did not address the consequences of this stratified structure on Arab-Palestinian society itself – even though, as noted above, as early as the 1970s, Rosenfeld was the first to take note of the Arab-Palestinian middle class. Other studies, such as those of Lewin-Epstein and Semyonov (1993) and Shalev (1993), emphasized developments in the social arena over which the political system has no control; but these studies also focused on existing national-ethnic hierarchical stratification in Israeli society and failed to clearly address internal processes of integration into the workforce and the growth of the middle class.

Research on Arab-Palestinian society since the mid-1990s is fundamentally different from the past two periods, in terms of both its critical position and its perception of Arab-Palestinian society as an integral part of Israeli society. Nonetheless, as is evident from the brief survey presented above, owing to its allegiance to the critical paradigm it has mostly failed to pay attention to internal changes in stratification within Arab-Palestinian society itself.

In general, other than changes in political positions, addressed in both official and critical studies, the professional literature in Israel has found it difficult to distinguish between general processes of change and changes in class structure.Footnote 2 Whether Arab-Palestinian society is perceived as a traditional minority that opposes modernization or as a political minority that suffers from social, cultural, and economic oppression, scholars of Israeli society have paid scant attention to the manner in which relations with Israeli society have created an internal dynamic within Arab-Palestinian society. Crucial issues such as conflicts of interest within Arab-Palestinian society stemming from integration into the labor force, the rise in educational levels, and other developments that have led to the growth of the new middle class, have been ignored.

The present article attempts to fill the lacuna in the existing research and to expand the theoretical points of view employed by sociology to understand Arab-Palestinian society in Israel. To this end, we have freed ourselves of several normative commitments and assumptions that have been at the base of critical sociology and have limited the discipline's interpretive space. The first of these is the commitment to social criticism and to advancement of the values of social justice and equality over analytical critique. Whereas the former refers to our personal values-based, moral judgment in relation to the issues we are studying, the latter refers to the understanding of the feasibility conditions of those same social incidences. Second is the assumption that the autonomous, sovereign individual is in need of liberation and must be saved from oppressive power structures. This emancipatory spirit, which seeks to liberate oppressed groups and individuals from their chains, underlies the desire of the critical discourse to expose power structures and situations of oppression. This critical position of distrust makes it difficult to contend with conflicting evidence that does not correlate with the previous assumptions and political biases of the scholars. (Mizrachi, this issue).

Unbound by these limitations, this pioneering study will attempt to investigate the new Arab-Palestinian middle class in Israel by looking at the encounter between the requirements of the Israeli economic structure and the role of the state in shaping the economy, the specific policy towards the Arabs, socio-cultural aspects of the Arab-Palestinian population, and the agency of the Arab-Palestinian residents in exploiting the various types of capital in the existing opportunity structure. The study's main foci are the identification of this class in economic terms, outlining of its cultural and social characteristics, and description of the historic processes that brought about its development. To put it another way, this is a study of the biography of the new Arab-Palestinian middle class in Israel.

A Framework for Analyzing the Growth of the New Arab-Palestinian Middle Class

The Theoretical Framework

In view of the similarity between the new Arab middle class and the Jewish middle class, we claim that the growth of the Arab middle class constitutes an integral part of the processes of mobility of other peripheral groups in Israel and their admission to the middle class. Hence, this article is based on the study of paths to mobility of these groups, so as to facilitate the description of the Arab-Palestinian middle class in Israel. This growth is connected to the encounter between the market, the state, and the specific policy towards the Arab population, and the socio-cultural characteristics and the practices through which it has reacted to the existing opportunity structure during various periods. Thus, in contrast to the critical position that views the reality of life of the Arab-Palestinian society as an outcome of oppression, or alternatively of opposition, this article emphasizes the agency of the Palestinian population as the factor causing the growth of the Arab-Palestinian middle class in Israel.

The theoretical point of departure of this article views class is an outcome of the activity of people who are grappling with historical, economic, and symbolic conditions at the time and place in which they are active (Thompson, 1963). This position is drawn broadly from Weberian and Bourdieusian theory. On the one hand, these allow us to identify the influence of the state on the shaping of the opportunity structure of ethnic groups and determine the value of cultural and social capital held by certain groups. On the other hand, this framework directs its gaze at the practices used by members of the group with regard to the spheres in which they operate. These practices facilitate the accumulation of cultural, social, and economic assets.

This theoretical position is common to the three pillars of the study that describe the development of the middle class within peripheral groups in Israel, by means of integration into the workforce (Rosenfeld, 1964, 1978), circumvention of the paths to the acquisition of the dominant cultural capital (Ayalon, 2008; Cohen & Leon, 2008; Haidar, 2009; Bar-Haim & Semyonov, 2015; Fuchs, 2017), and integration into the higher education system (Bar-Haim & Feniger, 2021; Lewin-Epstein & Semyonov, 1993; Ya’ar, 1986, Sami et al., 2021).

The Research Strategy

Drawing on this framework, the article will survey and analyze the processes that have brought about the growth and consolidation of the new Arab- Palestinian middle class in Israel, focusing on four main periods: 1. The period between the establishment of the State in 1948 up to 1967 – years during which the foundation was laid for the growth of this class. 2. The years from the Six Day War in 1967 until the 1984, a historical turning point that marked the beginning of a new period for the State of Israel, in general, in which the Arab middle class emerged; 3. 1985 until 2000 when neoliberal reforms and socio-political changes enabled the expansion and establishment of the Arab middle class; and from the beginning of the 2000s until present day, in which the Arab middle class continues its integration while facing a political backlash.

We utilize both historical and quantitative approaches. In the first part of the empirical section, we provide an in-depth review of the social, economic political and demographic transformation and their consequences regarding the Arab middle class. In the following section, we focus and the last two periods in which the Arab middle class became much more substantial, and we present descriptive findings regarding trends in the characteristics of the Arab middle class.

Characteristics of the Middle Class

On the economic level, we follow Yankelovitz’s (2004) definition of the Israeli middle class.Footnote 3 This class constitutes 33.2% (4–8 percentiles) of Arab households (Arab Society Yearbook 9, 2018). This is a considerable proportion, but it is still significantly lower than the percentage of middle-class households in Israeli society, which is 53.8% (OECD, 2019) and 65.5% of Jewish society without the ultra-Orthodox (Bank of Israel, 2019 Report, Selected Issues, Table 1).

However, in order to examine trends within the Arab middle class, we adopt a socio-demographic definition, rather than an economic one. When we examine the socio-demographic characteristics of Israeli households of the middle class, upper-middle class, and upper class in Arab-Palestinian society, we uncover the following characteristics (Arab Society Yearbook 9, 2018, Table C, p. 5, p.100).

  1. 1.

    Head of household is of working age and employed

  2. 2.

    Age of head of household is 35–54

  3. 3.

    Number of children: 1–3

  4. 4.

    The likelihood of belonging to the middle and upper-middle classes is greater among the self-employed than among salaried workers. This differs from the general society.

  5. 5.

    The overwhelming majority of households with two earners belong to the middle class or upper-middle class, in contrast to a minority of those households with only one breadwinner.

  6. 6.

    A large majority of households whose head had 13 or more years of education belong to the middle or upper-middle class, while less than half of households headed by a person who had 9–12 years of education are in these categories.

  7. 7.

    Most of household income is from work (especially among self-employed).

In order to both follow these characteristics among the Arab population over time and compare them to the Jewish population, we employ six cross-sectional Labor Force Surveys (from the years 1995, 2000, 2005, 2009, 2015, 2021). Each dataset includes between about 90,000 and 218,000 respondents, of which 18.38% are Arabs.Footnote 4

We follow the age-group of 35–55 present changes over time in:

  1. 1.

    Number of children

  2. 2.

    Percent self-employed

  3. 3.

    Percent of two earners in the household – Since this variable does not exist in the data, we estimate it using the information of the occupation of the female spouse in the household

  4. 4.

    Academic education – separately for men and women

These variables enable us to depict a rich picture of the Arab middle class in Israel and describe the changes within it between the 1990s and 2020s. We present these changes separately for each Arab group and for the Jewish group.

Empirical Findings

The Arab-Palestinian Middle Class Before 1948

Even before 1948, Arab-Palestinian society not monolithic and was vertically and horizontally stratified. The great majority of Palestinians were peasants or fellahin; some owned small farms, but most were tenants or hired laborera on estates owned by the gentry. The Bedouin desert nomads, still largely pastoral, made up the lowest socio-economic level.

The Palestinian village was based on low-technological level agriculture. Other than agriculture, there was little professional specialization, and possibilities for work outside the village were minimal. Villages and towns were also stratified according to economic advantage, minimal as that advantage might have been, and connections to external political and social power (Peretz, 1977:52).

Municipal governments did not have the power to change these power relations, and they certainly could not contribute to the development of a middle class. However, by the 1920s, and with greater impact in the 1930s, as opportunities for employment developed in British army camps, the ports, and the mandate bureaucracy, and well as in transportation infrastructure and other services, an alternative national class society had begun to emerge.

Prior to the British mandate, few children received any education, and even fewer had more than nine years of schooling. Even during the mandate, less than half of the existing villages had elementary schools, and 95% of these villages had no educational facilities for girls. Secondary education was available only in the cities, and even then on a limited scale, concentrated in Jerusalem (Tibawi, 1956: 244). Those who sought higher education went abroad to institutions such as the American University of Beirut.

Yet by the end of the mandate, Arab-Palestinians had begun to move from a traditional Middle Eastern to a modernizing society. Under the mandate, notable Muslim families continued to control the organized religious, political and social life of the Arab-Palestinian community (Peel, 1937), while urbanized notable families provided political leadership. Newly emerging urban professionals and businessmen, the first signs of the middle class and including merchants, workshop and home owners, lower level bureaucrats, local newspaper owners, and educated professionals, were concentrated in the cities.

1948 – 1966: Arab-Palestinians Grapple with the Establishment of the State of Israel

The 1948 war shook the pillars and the pyramid of Palestinian society in Israel. The upper and middle classes had left the country, leaving behind them a society lacking any elites or political, religious and spiritual leadership and without any organized systems of services. By 1949, the Arab-Palestinian population totaled only about 156,000 (18% of Israel’s population), most of whom lived in rural, traditional villages made up of clans and tribes, while a small minority lived in even poorer conditions in Arab or mixed cities.

Since the nascent state of Israel considered Palestinians to be a hostile minority, a military government was imposed (Baumel, 2007). Regulations imposed by the military included closures, a legal system based in the military courts, administrative detention, curfews, restriction of movement and a system of passes and work permits (Sa'adi, 2016; Baumel, 2007; Lustick, 1980). These policies were supported by political exclusion and stringent controls over political organization and social activity (Haidar, 1995: 28- 39; Rosenfeld, 1964). The state further attempted to prevent Arab political opposition through the cooptation of elites and provision of economic benefits, including employment, to those groups and localities that were loyal to the State (Archives of the Labor Movement and Mapai, 1959, “Recommendation on treatment of the Arab minority in Israel”).

Economic policies were put in place to prevent competition between Arab-Palestinians and the growing Jewish economy. These included expropriation of economic resources, non-development of physical infrastructure, non-approval or delay of outline plans, perpetuation of the inferior status of Arab localities, non-allocation of resources to private entrepreneurs, spatial and social segregation, control of the rate of labor force development, and tight supervision of the education system.

Traumatized and depressed, the Arab minority was largely resigned to this situation and seemed to accept their social isolation. By the 1960s, however, polices towards Palestinian citizens began to change. Restrictions on movement of workers were eased, and Palestinian workers were accepted into the Histadrut Labor Union as members with equal rights (Grinberg, 2013). Integration of the Palestinian work force into the labor market increased, and the government drew up plans for the development of Palestinian agriculture and localities. In 1966, the military regime was abolished.

Furthermore, policies and measures intended to relegate Arab society to the lowest rung of the class ladder and prevent accumulation of capital achieved only limited success and, in some instances, produced a paradoxical effect. Due to the traditional and family-oriented nature of Arab society, young Arabs preferred to remain on family land even after they abandoned agricultural work. This created a new division of labor: in the villages, landowners hired laborers to work their lands or rented their lands out and went to work in the Jewish economy. Many families leased orchards or lands belonging to internal refugees and absentee landlordsFootnote 5 which served as an additional source of income (Navon Institute, Histadrut Archive, “Workforce from the Arab sector,” Arab Department of the Histadrut, 1961, p.9,19). Agriculture was thus transformed from a source of livelihood to a resource for the accumulation of capital. A prominent upper class of land owners emerged; making up 5% -10% of the total number of households, these families and individuals were also able to invest in other branches of the economy, thus providing jobs and strengthening the Arab-Palestinian economy (Haidar, 1986, p. 290).

Others found work in the Jewish economy. Most were employed in the lowest-paid and most exploited jobs and had little or no economic security (Rosenfeld, 1978: 26). Some, however, were able to move from agriculture to construction work and services, and a minority found work in industry. These were salaried positions and allowed for the accumulation of capital that, combined with family agricultural produce, enabled many to build better homes, improve their living standards, and invest in their children's education (Haidar, 1986). Accelerated residential construction created specialized contractors and sub-contractors, who soon became among the highest earners in the Arab towns and villages (Lewin-Epstein & Semyonov, 1993). This, in turn, led to changes in patterns of consumption of personal services, hospitality, and leisure. Furthermore, as an individual’s profession became a major source of wealth, paths to individual mobility also increased.

Thanks to the rehabilitation of the state education system in some of the Arab localities, spearheaded by landowners and professional salaried workers, and along with the continued growth of private church-sponsored schools, most children received at least a rudimentary elementary education during this time period. The increasing enforcement of the Law on Compulsory Education and the Law on Free Education among the Arab populationFootnote 6 also increased the number of children enrolled in elementary and even secondary schools.

This led to an increase in demand for qualified teachers, which was met by the increasing numbers of Arab-Palestinians attending Israeli universities and, especially, teacher training colleges. The number of university graduates grew from 46 in 1951 to 678 in 1969. This lead to a growth in the number of Arab teachers, from 775 in 1951 to 2,967 in 1969 (Reches, 1973).

In pluralistic democratic regimes, conflicts of interest in both the political and economic spheres naturally arise between sectors, parties and individuals. These conflicts of interest enabled the Israeli government to act as a "patron" and to target and coopt young, educated Arab-Palestinians. To ensure their loyalty, vote, and dependence on the State, the State provided them with the opportunity to integrate into the public service, especially into the educational system (Lustick, 1980). Although this cooptation limited their ability to convert their education into a personal economic resource, it did simultaneously lead to significant improvement in the level of teaching and delineated a path for inter-generational mobility through education, which was a new phenomenon in Arab society.

Elites were also coopted, and the government offered economic privileges to specific individuals, families, tribes, religious groups, and localities in order to further its own goals. However, exposure to the opportunities available in Jewish society meant that many Arab-Palestinians were no longer willing to accept the previous rules of the game that perpetuated their lower status, and, as we shall see, this has had far-reaching effects on the Arab-Palestinian middle class (Haidar, 1995: 39).

By the end of this period, a thin social stratum, approaching a middle class in its economic and educational characteristics, had become noticeable. While this group still constituted a minority in Arab-Palestinian society, improvements in the quality, level, and accessibility of education pointed to possibilities for social mobility based on individual achievement. This increased motivation for risk-taking and independent economic activity. In addition to their economic implications, these developments were also cultural in nature, and played a crucial role in changing the class structure of the Arab population in the following decades.

1967–1984: Further, Yet Still Limited, Integration

The Six Day War in 1967 was a turning point in the conditions of the Arab population in general and the growth of the new Arab-Palestinian middle class in Israel, in particular. Over the two decades after the war, Jewish workers moved from work in traditional industries, construction, and services, to more remunerative professions that were less susceptible to economic crises. The availability of laborers from the Occupied Territories, who were largely uneducated and entered only into the lowest levels of employment, facilitated the upward mobility of Arab-Palestinian citizens of Israel, enabled them to integrate into more remunerative and less physically demanding occupations (Grinberg, 2013), and reduced their economic vulnerability. These trends also bolstered independent business initiatives, as some Arab-Palestinians became contractors, subcontractors, and business entrepreneurs.

Thus, in the decades following the war, Israel developed a dual economy, primarily divided according to ethno-national belonging, consisting of a traditional economy focusing on labor- intensive branches and a working economy leaning towards technology (Carmi & Rosenfeld, 1992; Lewin-Epstein & Semyonov, 1993; Swirski & Bernstein, 1980). Although these two trends primarily benefited the Jewish population, they also provided some advantages to the Arab-Palestinian minority. The entry of Palestinians from the occupied territories into the lower levels of the employment ladder facilitated upward mobility of Palestinian laborers who were citizens of Israel to less physically demanding and more remunerative occupations. Moreover, some of the non-professional laborers from the Occupied Territories were employed in agriculture within the Arab localities, thus freeing up Arab citizens of Israel for the Israeli marketplace. Others began to be employed by sub-contractors, contractors, and business entrepreneurs among the Arab citizens of Israel, a fact that bolstered independent business initiatives in this population.

1985–2000: Neoliberalism and Its Opportunities

The stabilization plan from 1985 constituted a definitive turning point in the Israeli economy and the beginning of the implementation of neo-liberal policies (Krampf, 2018, 222). Neoliberalism in Israel was promoted primarily by the state, and especially by Benjamin Netanyahu over his many years in government. Neoliberalism brought about privatization, liberalization, and globalization, and these led to a further easing of restrictions on the economic activity of the Arab-Palestinian minority. Property-ownership became more widely accessible, those with higher educations were integrated into the professional labor market, and businesses were developed in both Israel and abroad. This benefited peripheral groups in Israeli society and contributed to the growth and expansion of middle classes within these groups (Cohen & Leon, 2008).

During this period, bolstered by regional peace agreements and the Oslo process, Israel began to integrate into the global economy, especially the hi-tech industry. These changes increased employment opportunities for professional workers and white-collar workers. From the 1980s onward, most of the new Arab workers were absorbed into these occupations (Darr, 2018). However, at the same time, this globalization also led to an increase in the numbers of migrant workers from other countries and immigrants from the former USSR and the closure of numerous labor-intensive factories (some of which were transferred to Jordan) (Grinberg, 2013). These trends had a negative effect on uneducated and non-professional Arab citizens in Israel, many of whom abandoned the labor market (Haidar, 1991a, b:95).

The accumulation of capital by families and localities contributed to the growth of Arab entrepreneurship in industry in general and small industry in particular; in the previous period there were only 79 factories in the Arab-Palestinian sector; by the mid-1960s, the number had increased to 1,200 (Central Bureau of Statistics (CBS), Production Census 1952, Part A; Zarhi & Achiezra, 1966, 22). The numbers of small and medium business also grew in every economic branch; some were testimony to the small middle class that had already emerged, while others laid the foundations for its growth.

The education system, and especially higher education, continued to play an increasingly crucial and fundamental role in the growth of the new Arab middle class, serving as an entrance ticket to more remunerative and high-status occupations in the Israeli marketplace. This expansion of education was bolstered by the by the rise in the rate of participation in the labor market that enabled more families to release their children for studies, and as a reaction to the lack of government development of Arab localities that led to the search for sources of livelihood and served as an impetus for mobility.

The educational expansion was apparent at all levels of society, and particularly in the villages. The number of pupils aged 14–17 increased from 173,400 in 1961/2 to 926,000 in 1998 (CBS, Statistical Yearbook 51, 2000, Table 17–22). The increase in high school education was even more impressive. In the 1970s, there were only 18 schools serving 104 localities in the 1970s; by the 1990s, there was a high school in almost every locality (Al-Haj, 1996: 66, 68), and the number of pupils increased from 9,000 to 46,000 (CBS, Statistical Yearbook of Israel 40, 1989, Table 22.10; CBS, Statistical Yearbook of Israel 43, 1992: 629; Al- Haj, 1996, Table 4: 63; Arab Society Yearbook 1, 2005, Table D5). The main beneficiaries of the growth of high school education were the members of the up-and-coming middle class, who could now send their children (of all religions) to the private church education system, or enjoy the high-quality schools in their own localities, especially in mixed and Christian localities in the north (Swirski & Bernstein, 1980: 159).

The expansion of the education system also expanded the number of teaching positions in the Arab populations, which increased from some 2,500 jobs at the beginning of the 1960s to twenty thousand positions at the end of the 1990s (CBS, Statistical Yearbook of Israel 43, 1992; Arab Society Yearbook 1, 2005, Tables D5, D8). Given the difficulty of getting into the higher echelons of the Israeli work force, many educated members of the growing Arab middle class were absorbed into the education system – 30% of all teaching staff in 2001 had an academic degree (Arab Society Yearbook 1, 2005, Table B21). This also improved the level of teaching and achievement of pupils.

Higher education also expanded. During this period, additional colleges were established in a wider geographical spread, increasing accessibility to higher education for residents of the periphery. The colleges also provided an opportunity for young Arab-Palestinians who did not have the background necessary to get accepted into prestigious fields in the universities (Agbaria & Pinson, 2013).

Additionally, due to the geopolitical developments mentioned above and others, including the fall of the former USSR, institutions of higher learning in Jordan and in Eastern Europe, including Russia and Ukraine, opened their gates to young Palestinian men and women. Italy and Germany had already been accepting Palestinian students. Thus, there were increasing opportunities to study abroad in prestigious faculties, such as medicine, pharmacy, para-medicine, and the natural sciences, for students who did not meet the requirements for the more competitive Israeli institutions. Upon their return to Israel, these students were able to enter into the professional workforce, thus increasing their upward mobility and guaranteeing their entrance into the middle class.

2000-Present: Neoliberalism and a Change in Policy towards the Palestinian Minority

Once again, we can see that the Arab-Palestinian population was able to take advantage of unexpected opportunities. As tensions between the Jewish and Arab populations following the violent events of October 2000 and against the background of the Second Intifada increased, demand for Arab-Palestinian workers in the Jewish sector decreased. This promoted the growth of businesses in Arab localities. Although its actual contribution to the growth of the middle class has not been that substantive, this illustrates that class is not necessarily a product of government intervention and can develop through agency and deliberate creation of economic opportunities.

Despite this, the government has, indeed, had a tremendous effect on the Arab-Palestinian economy. Following publication of “The Future Vision Documents of Palestinian Arabs in Israel" in late 2006, the attitude of successive Israel governments has been based on two, seemingly contradicting yet actually complementary, policies that, taken together, compose a uniform strategic logic. On the one hand, successive governments have implemented a series of actions and programs designed to integrate the Arab sector into the Israeli economy. Indeed, in February 2007, the government resolved to establish the "Authority for the Development of the Arab, Druze and Circassian Sectors." On the other hand, these governments have also attempted to exclude the Arab-Palestinian minority from the political and cultural fields.

The concept of "equality" was replaced by the concept of "integration and sharing." This accords with the neoliberal world view of Israeli right-wing governments, which views modernization of the minority as a lever for upgrading the national economy, and the concept of the "economic peace" was promoted with regard to the problem of the Palestinian territories. The Israeli government thus has a vested interest in the full integration of the Arab-Palestinian minority and enabling it to reach its full economic potential. This has included an emphasis on women's employment and establishment of small businesses as a basis for increased job opportunities.

This two-pronged policy was intensified by Benjamin Netanyahu, who returned to the premiership in 2009 and based his policies on extreme, hawkish political exclusion and deep integration of the educated Palestinian workforce into the Israeli labor market.

The Middle Class in a Traditional Rural Environment – A Conflicted Identity

Up to this point, this article has surveyed the process leading to the development of the new Arab-Palestinian middle class, pointing to the dialectical link between the growth of this class and aspects of development in Arab society in general and, in particular, in the Arab towns and villages.

As we have noted, integration into the Jewish labor market was not accompanied by emigration from the towns and villages, and a significant proportion of the capital that these Arab workers managed to accumulate was therefore re-invested in the society from where they came, especially in residential construction, the younger generation, family, and local business activity. The emerging middle class has also been the leader of changes in patterns of housing, growth, expansion of employment opportunities and business activity, and development of public and personal services within these localities. However, these changes in the social and physical structure of the society and the localities did proceed apace with those of the new Arab-Palestinian middle class. Indeed, we will argue that the lifestyle and socio-cultural style of this middle class are largely shaped by the tension between their economic-professional mobility and the limited processes of change in their socio-cultural and physical spaces.

The major transformations in patterns of education and employment of the new Arab middle class have led to a number of important life-style changes, in particular in family life and consumer culture. From the mid-1970s onwards, there has been an increase in the age of marriage, a sharp rise in divorce, and an increase in the proportion of single people, both male and female. There has also been a significant drop in fertility and family size. All of these have led to a change in family lifestyle, which has come to revolve around the nuclear, rather than the extended, family and the education of children (Atrash, 2011, Haj-Yahia, 2006). In conjunction with these demographic changes, consumer culture has developed relatively rapidly into different fields. The new Arab-Palestinian middle class has largely adopted Western patterns of consumption and leisure, as evidenced by increasing expenditures on housing, transport, and communication, and a relative decrease in the proportion spent on basic needs, such as food (Arab Society Yearbook 9, 2018, Table C13). Members of the Arab middle class have also adopted Western styles of dress, although at the same time, we see a trend towards a return to traditional dress, especially head coverings. Many Muslim Arab women studying in higher education institutions attend classes in traditional religious dress. Among this new middle class, consumerism is largely conspicuous and ostentatious, as evidenced by spacious houses, luxury cars, prestigious brands in fashion and culture, participation in the Haj (pilgrimage to Mecca), and travel abroad (Harel-Kfir, 2011).

Conversely, changes Arab-Palestinian society, especially in the physical space of the Arab localities, which have remained largely collectivist and traditional, have been much more limited. The reasons for this are diverse and beyond the scope of this paper; in general terms, we cite here the significant discrimination against these localities in the allocation of budgets, the statutory non-assignment of commercial property that would yield municipal property taxes, and the unwillingness of the state to prepare master plans and planning for Arab localities, which hinders the physical growth and the housing plans (Meir-Brodnitz, 2012). As a result of all these, no urban residential environments have developed, nor have suburbs, which are a characteristic of the Israeli middle class (Birenbaum-Carmeli, 2000; Shani & Bar-Haim, 2020) spread up around the cities and localities. Even within the localities, there has not been any geographical separation based on class status; therefore, in the same neighborhood, we can find huge villas that have been constructed by private builders alongside the houses of the poor (Almog, 2010).

This collectivist-traditional character of is reinforced through social coercion, which stems from a sense of discomfort in relation to tradition and to other residents (Atrash, 2011: 55). The weddings and festivals and the culture of compulsory gift-giving generate extensive discomfort, and residents have become fiercely critical of the high costs of the gifts and the noisiness of the celebrations, which almost always now include setting off loud fireworks (ibid). Despite this, there have been almost no initiatives to make changes in these ceremonies, customs, and celebrations.

Despite some growth of individualism among the middle class, the clan continues to serve as the individual's primary community, and it is the institution of affiliation with the greatest power. The clan has a significant role in creating economic mobility since the division of power within Arab localities, which includes distribution of benefits to the ruling clans in the local authority, makes it possible to offer access to jobs in the public and private sectors and to win contracts to carry out works within the locality. The high levels of cohesion and solidarity among the members of a clan (Mustafa, 2010) find expression in life-cycle events, such as weddings and funerals, as well as in the competition over power resources. At times, these competitions deteriorate into violence, which may continue sporadically for years.

The persistence of traditional patterns is also evident in the status of women (Azaiza et al., 2009: 1). On the one hand, women’s achievements in the sphere of education are greater than those of the men, and among certain groups in the Arab-Palestinian middle class, the women enjoy more freedom and independence (Haj-Yahia, 2006:11) On the other hand, women’s representation in the public sphere and in local and national politics is very low and there are still significant gender gaps in work force participation, employment, and wages (Tzameret-Kercher et al., 2020).

It is important to note that even in the middle class, the status of women has been negatively affected by increased religiosity and the growing return to formal religious affiliation that has characterized Arab-Palestinian society over the last three decades. The clearest expressions of this process include the strict, uncompromising demarcation between men and women in space, the expropriation of a woman’s rights of inheritance, lack of representation in affairs of the clan and the locality, and demands for modest attire. In some families, women still must receive permission from their families to study or to work, and for any movement outside the home; in most cases, permission is granted only on condition of various restrictions (Azaiza et al., 2009).

The return to religion also has a negative influence on cultural activities and consumption of culture by the Arab-Palestinian middle class. After a flourishing of cultural consumption in the 1990s, we are witness to a retreat over the past two decades, due to the increased influence organized Islamic movements and other traditional forces over local government.

The heterogeneity of the Arab middle class exacerbates the tension between traditionalism/ ruralism and Westernism/ urbanism. This heterogeneity, the result of the differences in levels of education, patterns of employment and income, clan affiliation, and place of residence, has led to great diversity in lifestyle and worlds of meaning among the members of the new Arab middle class. Today's middle class consists of both traditional and conservative groups alongside more liberal groups. Some are asserting global identities, although these individuals tend to belong to the upper echelons of the middle class, are the most adapted to the use of technology, and have adopted modern family structure, customs, and attitudes towards the status of women (Dwiri, 1997; Elias, 2008; Zuabi, 2007). The majority of the members of the middle class, however, are ambivalent and dualistic, having adopted a Western lifestyle in areas of consumerism, type of residence, demographic behavior and the nuclearization of the family, while continuing to adhere to tradition with regard to relations between the individual and society and their attitudes towards the status of women and children (Khoury-Kassabri et al., 2006).

The role played by the middle class in changing the rural culture, therefore, is limited. The most liberal groups segregate themselves or migrate away from the village and, in this way, they actually preserve their relations of affiliation and the power of the clan which itself, at the present time, is limited over young individuals with advanced education. The majority of this middle class continues to live in the localities in which the standards of infrastructure and the environment, along with patterns of public behavior (noisy celebrations, brawls, driving behavior) are not compatible with their aspirations for a middle class quality of life and pleasant surroundings.

Therefore, Arab-Palestinian class has a weak sense of local citizenship and expresses its identity primarily through culture and consumerism. Despite their achievements, personal mobility, and investments in some areas, such as education, their impact on public space is limited, and they make do mostly with leveling criticism about the situation without attempting to change it (Kasir et al., 2019). Some members of the middle class have given up on the struggle for control over sources of power and do not believe that they can change the traditional lifestyle so that their towns and villages would replicate life in mixed or Jewish cities (Abbas, 2015; Bank of Israel, 2017; Meir-Brodnitz, 2012).

Following this historical analysis, we turn to demonstrate how the distribution of several characteristics related to the Arab middle class in Israel changed over the last two periods.

Quantitative Results

We begin with number of children. Figure 1 presents changes in the number of children under 14, for each religious group, for the age group of 35–55.

Fig. 1
figure 1

Average Number of Children Age 0–14, by Religion and Year

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As can be seen in Fig. 4, the number of children in the household decreased between 1995 and 2021 for all the Arab groups, while among Jews it increased. While the increase among Jews is an anomaly that has been widely discussed in the demographic literature (Okun, 2016), the trend among all the Arab groups, and especially the Muslims, is what would be expected for an increasing middle class.

Figure 2 presents a slightly different pattern. In Fig. 2 we calculate the average percent of respondents who are self-employed. Here we see an increase for all religious groups from 2000 until 2009. Then, there is a divergence, in which the share of the self-employed among the Muslims and Christians decreases while the trend among the Jews is the opposite.

Fig. 2
figure 2

percent of Self-Employed, by Religion and Year

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Turning to the third characteristic, the dual earner household, we find an impressive change. As can be seen in Fig. 3, which depicts the percent of dual earners households, all the Arab religious groups increased their percentage of dual earners households dramatically. Between 1995 and 2021, the share of dual-earners households among Muslims increased from less than 8 percent to more than 47 percent. Other groups experienced a similar, albeit smaller, increase. However, the share of dual-earners households among Jews is still much higher than in any Arab group.

Fig. 3
figure 3

Percent of two earners in the household, by Religion and Year

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Lastly, we present the trend in higher education among the religious groups, separated by gender. Figure 4a presents the trend for men. There is an increasing trend for academic education among all the groups. However, there are some differences between the groups. While the Druze present a slow and steady growth, the Muslims present both much steeper trend and a setback during the first half of the 2000s. A similar setback, albeit less pronounced, can be seen among the Jews.

Fig. 4
figure 4

a Percent of BA + holders, by Religion and Year, Men. b Percent of BA + holders, by Religion and Year, Women

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The pattern among Arab women is even more striking. While both Muslim and Druze women had almost no academic education in this age group until 1995, these two groups have increased their participation in higher education to a level of more than 17 percent. The impressive increase did not occur until the late 2000s, implying that it was not the mere educational expansion that helped Muslim and Druze women to increase their participation. Christian women, who enjoyed relatively high levels of academic education at the start of the period, increased their participation until the 2010s but their participation has remained stable since then. Among Jewish women, there was a sharp increase by the late 2000s, which continued until 2021, increasing the educational gap between Jewish and Arab Women.

To summarize our results, we found that in all but one characteristic of Arab middle-class society, Arabs, and especially Muslims, improved their participation. It is important to note that most of the improvement can be related to gender egalitarian changes in the Arab society – increase of participation of women in the labor force, higher educational achievements, and a smaller number of children. The only characteristic in which they did not show improvement is the one that is considered unique to the Arab middle-class society, i.e., the percent of self-employed. However, self-employment as a middle-class characteristic among minorities is known to be a result of labor market discrimination (Neckerman et al., 1999) Hence, attrition in self-employed among Arabs might be a sign of alignment with Hebrew middle-class society which is less characterized by self-employment.Footnote 7

Conclusion

The paper has presented a narrative of the growth of the Arab-Palestinian middle class in Israel and delineated the timeframes and social trends which led to its development. During each period, the Arab-Palestinian middle class in Israel grew at the point of intersection between government policy and the political economy of Israeli society, which shaped the graph of opportunities. Moreover, in the last two decades, and in contrary to common perception, the Arab middle-class has grown massively. We discussed the socio-cultural characteristics of Arab-Palestinian society and the agency of its members, who have been able to exploit the existing structure of opportunities despite its inherently discriminatory character.

The absence of a narrative of this success in sociological and social research is evidence that the existing literature has been profoundly obtuse. The inclination to examine Arab society and define it primarily through its relationship with the Jewish majority society, whether these are perceived through the modernization approach or through a critical position, has led to a disregard for the internal processes that have been taking place in Arab-Palestinian society as a result of these relationships. The great, and even exclusive, emphasis placed on the political awareness of Arab-Palestinians has diverted attention away for questions of class to questions of modernization and, subsequently, to questions of control and resistance. It is also important to note the difficulty that critical sociology experiences when it attempts to incorporate descriptions of positive change, which has led contemporary scholars to continue to focus on mechanisms of discrimination and exclusion, despite evidence of social mobility.

The disregard for the growth of the Arab-Palestinian middle class also misses out on the complexity of Arab-Palestinian society. As noted in the concluding section of the historical description, the identity of the Arab-Palestinian middle class is defined not only in relation to Jewish-Israeli society, but also in connection with Arab-Palestinian space and society. As we have shown, the Arab-Palestinian class is split across several dimensions: between its identity and class-related lifestyle and its residence in Arab localities that have largely remained rural and traditional and lack the physical and cultural infrastructure that would be compatible with the habitus of the middle class; between a more-Western characteristics of lifestyle, family structure and leisure culture and traditional cultural characteristics and preferences; and between the diverse groups within the middle class itself. This class has thus succeeded in acquiring an identity for itself and the economic means that affiliate the individual or the family unit with the middle class, but it has not yet been able to change the society and the space surrounding it.

The description of the growth of the Arab-Palestinian middle class is not just an empirical addition to existing research; it attempts to expand upon and illuminate the dominant view of critical sociology with its emphasis on uncovering power structures and freeing the downtrodden by means of those structures. This paper thus proposes an important research path to the understanding of contemporary Arab-Palestinian society in Israel.