Economic crisis leads to decline in immigration

From 2000 to 2008, Spain experienced large-scale immigration, with many people coming from Morocco, Romania and Ecuador. Thus, in 2008, immigrants represented slightly over 11% of Spain’s total population. However, due to the current economic crisis, the number of foreigners coming to the country has declined as the government has introduced various control measures. Attitudes, decisions and activities in this area have been fuelled by changing labour supply and demand.

Trends in immigration

Before 2000, Spain’s population became stagnant and immigration was particularly low. In 2000, fewer than a million people of foreign origin were living in the country. As a result, from 2000 to 2008, Spain experienced large-scale immigration. By 2008, the population of foreign origin reached 5,220,600 persons, representing about 11.3% of the country’s total population. In total, about a million of these persons had Spanish nationality. Almost 700,000 of immigrants are Moroccan, more than 600,000 are Romanian and about half a million come from Ecuador. British people account for about 300,000 of foreigners living in Spain, with significant numbers of Argentinean, Bolivian, Colombian, French and German people also prevalent in the country.

The high growth in immigration in Spain makes it the second highest in Europe. This may be explained by the fact that Spain is close to Africa, has a long coastline and is easily accessible by air, particularly with many flights coming from Latin America in the summer. It also shares the same language as most Latin American countries, and many sectors of economic activity have absorbed high proportions of low-skilled workers in exchange for wages below those prevailing in the labour market. For example, this is the case in agriculture, hotels and restaurants, construction and domestic work. Moreover, access to public health and public education does not require a foreigner to have legal status in Spain.

Employment of foreign workers

Real gross domestic product (GDP) growth between 2001 and 2007 amounted to 3.4%. Over the same period, 4.3 million net new jobs were created in Spain, of which more than half have been filled by immigrants. In the five years before 2008, female employment increased by two million people, and male employment by 1.5 million workers. Immigrants represent about 66% of the growth in male employment and over 40% of the increase in female employment. The labour market participation rate of immigrant women has been increasing up until the beginning of the economic crisis, and is still increasing.

Illegal immigration and employment

Illegal immigration has resulted, in many cases, to illegal employment, which is characterised by low wages. Illegal workers have been used by many employers and also by homeowners wanting to rent houses at higher prices. The incidence of irregular migration in the economy became so alarming that the government was forced to make an adjustment in 2005, granting amnesty to about 700,000 undocumented foreigners.

Government launches control measures

At the same time, the government launched efforts to prevent the influx of illegal immigrants. Measures in this regard include: repatriation; control procedures; diplomatic arrangements with immigrants’ countries of origin; formal recruitment of workers in their home country; as well as restrictions on family reunification.

Immigration decreased slightly, but remained high until 2008. When the economic crisis began, both supply of and demand for workers were affected. The construction sector was first to be affected by the crisis, followed by hotels and restaurants, personal services and then other sectors. The economic downturn has resulted in a marked increase in unemployment, hitting mostly workers in low-skill occupations, including many immigrants.

The government has implemented various restrictive measures on the number of immigrant workers. For example, it has offered immigrant workers the option of returning to their home country, reduced the list of occupations with difficult coverage (in Spanish) and introduced restrictions for immigrants on family reunification in Spain. Thus, in 2008, the number of residence permits dropped by 50,000.

Commentary

Media reports in the newspapers El Mundo (in Spanish) and El País (in Spanish, 634Kb PDF) point to the fact that the social partners have generally been very lenient towards cases of immigration, while they have criticised those who have benefited from illegal immigration. In the case of employers, immigration has helped to expand the supply of labour. However, from the trade unions’ point of view, immigration has also helped to push down wages in several occupational areas and has contributed to rising house prices.

Immigration has contributed significantly to recent developments in Spain. However, according to an analysis (in Spanish) by Martin Urriza of the Federal Technical Committee of the Trade Union Confederation of Workers’ Commissions (Confederación Sindical de Comisiones Obreras, CCOO), the growth model that has developed in Spain since 2000 has been based on construction and low value-added services. Such growth has created many jobs that native Spaniards have largely refused to take up, leaving these jobs open for foreign workers. This has accentuated a split in the labour market, in the form of a division between good and bad jobs that fuels social cohesion problems.

Esteban Villarejo, CIREM Foundation