ABSTRACT During the first two decades of statehood, Israeli labor policy advocated for full employment by creating new workplaces or work relief in order to absorb the mass waves of immigration. The dominant ideology was that of work ethos – work was perceived as a human and social value; therefore, Israelis believed that money should be paid for work and not for unemployment. In the beginning of the 1960s, the government related to labor as an economic instrument that was supposed to serve the meta-economic goal of economic independence. The political and social relations that existed between 1967 and 1985 were based on human capital and material reward. This was a liminal period. Since 1985, the government has led a revolution that transformed work into employment. This converted the workers into employees who serve economic and business ends. Labor became employment. Led by the Israeli government, this transformation ran counter to workers’ attitudes that preferred job security and collective stability. The fundamental change was dictated from above and was not a consensual shift.