Impact of immigration on employment and pay examined

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Spain has been witnessing increased immigration in recent years, and the trend is set to continue in future. Two studies published in 2003 shed some light on the employment situation of immigrant workers and their impact on pay and conditions. Notably, immigrant workers are employed in a relatively narrow range of sectors, and real pay levels have been falling in these industries since the mid-1990s. Trade unions attribute this to the increased employment of immigrants on poor employment conditions and are calling for regulatory action and the application of the conditions laid down in the collective agreements.

According to figures from the Municipal Census (Padrón Municipal), there were 1,984,573 immigrants in Spain on 1 January 2002. According to the Ministry of the Interior (Ministerio del Interior), the figure was 1,647,011 in 2003, of whom 1,074,895 were from outside the EU - see table 1 below. There is no doubt that immigration is increasing, and in 2003 the number of foreign nationals was 24.4% higher than in the previous year.

Table 1. Number of foreign nationals in Spain, 1997-2003
Year 1997 1998 1999 2000 2001 2002 2003
No. of immigrants 609,813 719,647 801,329 895,720 1,109,060 1,324,001 1,647,011

Source: Government Office for Aliens and Immigration (Delegación del Gobierno para la Extranjería y la Inmigración).

According to a recent study by the Trade Union Confederation of Workers’ Commissions (Comisiones Obreras, CC.OO), it is very difficult to calculate the number of immigrants in Spain because of their geographic mobility within the country (Trabajadores extranjeros y acción sindical, Cuadernos de Información Sindical nº 46, CC.OO, October 2003). Immigrants tend to register as residents on municipal registers because this is a condition for access to the public health service and public education. However, municipal councils tend to keep immigrants who move away on their registers because they receive funding according to the population registered in the census. Despite this difficulty in calculation, it is estimated that immigrants make up over 4% of the Spanish population, a figure which is still lower than the 5% in France and Sweden and the level of over 8% in Belgium, Germany and Austria.

In Spain, immigrants are highly concentrated in certain areas. They form a relatively large proportion of the local population in Alicante (8.6%), the Balearic Islands (8.3%), Almería (7.3%), Girona (6.9%), Madrid (6.8%), the Canary Islands (5.8), Málaga (5.8%), Murcia (5.8%), Castellón (4.9%) and Barcelona (4.8%). Most of these areas are on the Mediterranean coast and have labour-intensive businesses such as construction, hotels and catering, agriculture, domestic service and retail. As many as 74.5% of all immigrants are concentrated in these five sectors of activity, plus wholesale and 'other' business activities, compared with 50.3% for workers of Spanish naservice, wheretionality - see table 2 below. Women are particularly prevalent among immigrant workers in domestic service, where they make up over 90% of the total, and in the hotels and catering sector.

Table 2. Sectoral distribution of employment of foreign and Spanish nationals in main branches of activity for foreign nationals, end 2002
. Sector's share of group's total employment (%) Women as % of employment in sector/group
. Foreign nationals Spanish nationals Foreign nationals Spanish nationals
Construction 15.4 10.6 3.9 5.3
Hotels and catering 14.6 5.7 47.7 47.0
Agriculture 13.9 7.5 17.5 27.0
Domestic service 10.3 0.9 90.0 87.2
Other business activities 8.4 8.6 47.3 51.1
Retail 7.3 11.2 40.4 59.7
Wholesale 4.6 5.8 34.1 28.1
Total 74.5 50.3 37.2 37.6

Source: CC.OO, based on social security and labour force survey statistics.

A majority of immigrant workers are from developing countries (ES0304205F). This is particularly significant in the case of women in this group: 46% of them are from Latin America, 15% from Africa and 4% from Asia.

Immigrant women

A recent analysis of female immigrants published by the research services of the Economic and Social Council (Consejo Económico y Social, CES) finds that most of them work in domestic service, where there is strong demand because of the ageing Spanish population, increasing longevity and the increasing involvement of Spanish women in the labour market (La inmigración femenina en España, Panorama sociolaboral de la mujer, Boletín nº 31, CES, 2003). Almost three-quarters of immigrant women enter domestic service - a sector that is already highly feminised, requires few qualifications and enjoys little prestige.

One of the positive effects of immigration, among many others, is their contribution to the growth in contributors to the social security system, which is fundamental for sustaining the welfare system and for the future of the pensions of an ageing population - see table 3 below. Immigrant women are also playing a major role in the growth of 'proximity services', which are becoming increasingly necessary because of the changes in the demographic structure of the Spanish population.

Table 3. Foreign workers registered for social security, 1999-2002
. 1999 2000 2001 2002
Total registered workers 14,344,900 15,062,900 15,649,900 16,120,664
Total foreign workers 334,976 402,711 557,074 760,544
Female foreign workers 118,604 139,730 190,577 265,722
Contribution of foreign women to growth in social security contributors - 9.4% 26.3% 43.2%

Source: CES (2003).

Precarious employment

A highly significant indicator of the labour market situation of immigrants is their high level of 'precarious' employment, with about 65% of foreign national workers on temporary contracts. The temporary employment rate of immigrant workers aged 16-45 from outside the EU is considerably higher (65.2%) than that of Spanish nationals workers (35.7%) and immigrant workers from elsewhere in the EU (31.7%) - see table 4 below.

Table 4. Temporary employment rate of employees aged 16-45, 2nd quarter 2002 (%)
. Spanish nationals Other EU nationals Non-EU nationals
Men 33.8 30.1 69.9
Women 38.4 36.4 59.7
Both sexes 35.7 31.7 65.2

Source: CC.OO, based on labour force survey statistics.

One of the reasons cited for the high rate of temporary employment is that it forms part of employers' strategies for reducing labour costs. This is accompanied, according to CC.OO, by a lower level of working conditions, such as a lower average wage, increased working time and a higher industrial accident rate in sectors with a greater number of immigrants. For CC.OO, three factors make immigrants particularly vulnerable and willing to accept any job they are offered: many of them have no Spanish documentation because they have entered the country illegally; those who are legal must renew their residence permit periodically; and agriculture and hotels and catering are seasonal sectors that are labour intensive (ES0302205F).

Immigrants also suffer from the temporary nature of their residence permits, in accordance with the regulations. These regulations usually restrict the period to one to two years, after which regular renewal is necessary. Residence permits are issued for over 90 days and less than five years. The duration of the residence permit is linked to the duration of the work permit.

Influence of immigration on pay

The CC.OO study states that the employment of immigrants on precarious employment conditions has lowered the average wage in the sectors in which they are most often employed - see table 5 below. Between 1996 and 2000 the average wage in construction fell by 3.1% in nominal terms and 13% in real terms. In retail, the average nominal wage grew by 5.8% over this period but in real terms it fell by 5%, while in hotels and catering the nominal wage rose by 4% but fell by 6.6% in real terms.

Table 5. Development of labour costs in main sectors of employment of immigrant workers, 1996-2000, EUR per worker per year
. 1996 2000 Change between 1996 and 2000 (%)
Sector Gross labour cost Wages Gross labour cost Wages Nominal labour cost Nominal wages Real gross labour cost Real gross wages
Industry 25,258.7 18,488.6 26,331.9 19,278.4 4.2 4.2 -6.4 -6.4
Construction 20,353.9 15,385.3 20,537.9 14,909.5 0.9 -3.1 -9.4 -13.0
Retail 18,536.4 14,043.2 19,885.6 14,860.2 7.3 5.8 -3.7 -5.0
Hotels and catering 14,146.0 10,761.1 15,080.1 11,196.8 6.6 4.0 -4.3 -6.6
Transport 26,757.1 19,389.9 28,671.0 20,830.5 7.2 7.4 -3.8 -3.5
Financial mediation 16,413.6 12,473.4 18,581.0 13,971.1 13.2 12.0 1.6 0.6

Source: CC.OO, based on labour cost survey statistics.

For CC.OO, insufficient labour regulation, together with the abundant supply of - often illegal - immigrant labour is pushing down wages and lowering working conditions. This problem is seen as a potential source of industrial conflict that requires a firm intervention by the regulatory authorities and the application of the prevailing collective agreements in the sectors concerned. The trade unions state that immigrants should be entering Spain through the legal channels, and that the pool of illegal immigrant workers should be reduced. Failure to do this, they claim, would favour the 'underground' economy and further damage working conditions.

Commentary

The sustained growth of the Spanish economy since 1996 has also led to a sustained growth in employment, and in particular to the greater involvement of women in the labour market. These two processes - economic growth and growth of female employment, creating a need for the provision of certain services - are powerful factors of attraction for labour from other countries. The National Statistics Institute (Instituto Nacional de Estadística) estimates that in the next 20 years over 3 million immigrants will enter Spain, representing an average of 150,000 people per year. This tendency towards an annual increase in immigrants can already be observed (see table 1 above). The foreseeable scenario is that in 2020 some 4 million foreign nationals will be living in Spain, which will represent 9.7% of the total population. This may be a positive development if one bears in mind that the immigrants tend to be young and can help to raise the birth rate and recover the falling population. In fact, the indicators already show this tendency (10% of the births registered in 2002 were children of immigrants). Another positive element is that immigrants are helping to sustain the pensions system and to make it viable.

However, one source of conflict is the abusive use of temporary recruitment and the falling wages in sectors with a high proportion of immigrants, such as construction, hotels and catering, agriculture, housework and retail. Some studies stress the role played by the pressure of immigration in increased inequality in pay and working conditions (see 'Efectos macroeconómicos de la inmigración. Impacto sobre el empleo y los salarios de los nativos', A González Ferrer, Revista Papers nº 66. Universidad Autónoma Barcelona, 2002). This is a potential source of conflict that requires urgent measures of 'regularisation'. However, the problem is not easy to solve because of the international mafias that traffic in people. The regulatory measures require concerted action at European level. (Antonio Martín Artiles, QUIT)

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