Immigrants benefit economy but experience poor working conditions

Substantial immigration inflow is one of the most significant changes that has taken place in Spanish society in the last two decades, and this situation is also having positive effects on the country’s economy. However, immigrants tend to occupy poor quality jobs, mainly characterised by low qualification requirements, low wages, substandard working conditions and of a temporary or seasonal nature.

The First of May Foundation (La Fundación Primero de Mayo) of the Trade Union Confederation of Workers’ Commissions (Confederación Sindical de Comisiones Obreras, CC.OO) recently published several papers from a seminar organised in June 2006 on ‘Immigration, migration policies and trade unions (in Spanish, 400Kb PDF)’. Within this document, it is worth highlighting a report by Joaquín Arango on ‘Immigration in Spain: The full picture’ (p. 23 of file).

Sixfold increase in non-nationals

According to the report, the increase in immigration is one of the most significant changes to have taken place in Spanish society in the last two decades, and will have a greater impact in the near future. In fact, the presence of foreigners in Spain has increased sixfold in the last 16 years – counting data only referring to those non-nationals with a valid residence permit. According to Eurostat information (236Kb PDF) included in the report, more immigrants have come to Spain than to any other EU Member State.

The 2005 Spanish Population Census counted some 3.7 million registered foreigners at the beginning of that year, representing 8.5% of the total Spanish population. Moreover, a substantial number of immigrants work in irregular or illegal situations, resulting in large-scale processes of regularisation in 1986, 1991, 1996, 2000–2001 and 2005.

Profile of immigrants

The majority of immigrants are young adults aged between 25 and 44 years old, usually single or not accompanied by their partner. A little less than 50% of immigrants are women. This profile, which is usually related to the first phases of any immigration process, remains dominant and corresponds to people who emigrate due to economic reasons. This explains the higher labour market participation rate among immigrants, at 72.2%, in comparison to that of the Spanish-born population, at 52.9%.

Concerning the geographical origin of the immigrants, the larger national groups are coming from the following regions: South America, mainly Ecuador, Colombia and Peru; the Dominican Republic; China; Africa, mostly Morocco; and eastern Europe, such as Romania, Ukraine or Bulgaria. From a gender perspective, it is interesting to note significant differences depending on the geographical origin of immigrants. For example, most of the immigrants coming from Africa are men, whereas women are predominant in the group coming from South American and the Dominican Republic.

In terms of sector, immigrants are particularly concentrated in construction, bars and restaurants (ES0512105F), agriculture and in personal services; in the latter sector, women mainly work in domestic services. These sectors employ around three quarters of the total immigrant workforce. Nonetheless, other sectors also report an increased presence of foreign workers, such as retail and wholesale trade, transport, fishing, or caring activities for elderly people.

Reasons behind demand for labour

The report suggests two main inter-related reasons for the high demand of foreign workers in the Spanish economy. Firstly, immigrants occupy those jobs and working positions that Spaniards do not want to accept – this may be termed a ‘complementarity effect’. However, there is also a ‘substitution effect’, in the sense that Spanish employers are hiring foreigners to occupy certain jobs as these immigrants are ready to accept worse working conditions or lower salaries than Spanish people are.

Thus, immigrants are regarded as a source of opportunity for increasing profitability levels by employers in some economic sectors. As a result, immigrants tend to occupy the lowest layers of the Spanish occupational pyramid, filling poor quality jobs mainly characterised by low qualification requirements, low wages, substandard working conditions and of a temporary or seasonal nature.

Positive effects of immigration

Immigrants contribute to the Spanish society and economy in several positive ways. Non-nationals are the main factor explaining the population growth in recent years: between 2000 and 2005, the population in Spain grew from 40.5 to 44.1 million people – immigrants represent 90% of this growth. Immigrant parents are also contributing significantly to an increase in Spanish birth rates. Fertility indexes are higher among foreign women in comparison to Spanish women, at -1.92 and 1.21 children per female category, respectively. Thus, around 15% of the new babies born in Spain have a foreign mother.

From an economic perspective, immigrants are at the heart of the boom which the Spanish economy has been experiencing since the early 1990s, increasing output and consumption levels. Interestingly, the immigrant population is positively contributing both to the social security system and to the state finances, as most of them are paying taxes and social contributions but do not demand as many social or health benefits, since they are mainly of working age. The report suggests however that these positive impacts are likely to lessen in the future, as the immigrant population will converge with the socioeconomic characteristics of the local Spanish population.

Iñigo Isusi and Antonio Corral, IKEI

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