Economic downturn impacts most on migrant workers

The Spanish labour market is currently experiencing an economic downward trend, resulting in increasing unemployment rates. Foreign workers are particularly affected by this negative situation, as they are mainly employed in the economic sectors and occupations most hit by increasing unemployment. Promoting self-employment initiatives among foreign workers is seen as a possible solution to overcoming this problem.

The Permanent Observatory of Immigration (Observatorio Permanente de la Inmigración), attached to the Ministry of Labour and Immigration (Ministerio de Trabajo e Inmigración, MTIN), analyses information relating to immigration. The observatory has recently published a report on immigration and the labour market, entitled Inmigración y Mercado de Trabajo (in Spanish).

Spain experienced continuous economic growth from 1994 to 2007, which led to an increase in labour force demand, thereby favouring a higher volume of migration into the country. However, since late 2007 onwards, signs of an economic slowdown have become evident, causing a direct negative impact on the labour market in general and in particular on the labour situation of many migrant workers. The main issues arising from the latter perspective are outlined below.

Working immigrants and unemployment rate

According to the Spanish Labour Force Survey (Encuesta de Población Activa, EPA), at the end of 2007 some 2,887,000 foreign workers were employed in the Spanish labour market – 285,200 more than in 2006. However, this increase is proportionally lower than the numbers given in previous years, which reached about 400,000 new working migrants a year. The latest data available for 2008 seem to confirm the downward trend of 2007.

At the end of 2007, the unemployment rate for immigrants was 12.4%, whereas this rate stood at 7.9% for Spanish workers. During the first quarter of 2008, the unemployment rate for migrant workers rose to 14.6%, while the rate for Spanish workers reached 8.7%. Thus, unemployment is a problem increasingly affecting the Spanish labour market, but especially foreign people.

Sectoral differences

In terms of economic sector, construction is one of those more affected by the economic slowdown in Spain. According to social security statistics, between January 2007 and January 2008 some 25,000 fewer workers were employed in the construction sector. However, the data collected by the EPA, which includes all working people even if they are not affiliated to the social security system, show an increase of 71,000 workers in the construction sector during 2007. Therefore, by comparing the information available, the report assumes that employment in the construction sector grew mainly by means of undeclared work – in other words, outside the social security net – which is predominant among immigrant workers.

By way of contrast, according to the EPA, the most substantial growth was found in the services sector, with 202,200 new jobs taken up by migrant workers in 2007; nevertheless, this figure is notably lower than the 277,600 new jobs for immigrants in 2006. Overall though, the slowdown of employment in construction has been cushioned by the still significant increment in the services sector, particularly in catering and hotel-related activities.

Impact on low-qualified occupations

According to the EPA, foreign workers are concentrated in low-qualified working categories. Thus, 34.2% of the foreign nationals working in the Spanish labour market have low-qualified jobs, whereas the corresponding proportion for Spanish workers is 11.5%. Furthermore, foreign women usually occupy the lowest qualified posts, while men assume tasks requiring medium qualification levels. With regard to unemployment, statistics show that, in 2007, low-qualified workers were more likely to lose their job.

It is interesting to note that low-qualified jobs and low levels of academic education are not directly related, especially in the case of foreign workers. In general, the medium level of education of immigrant workers is not much lower than that of unemployed Spanish workers, despite the fact that more immigrant workers seem to find themselves in low-qualified positions. Therefore, the report suggests that the Spanish educational system should be strategically tailored to match unemployment and immigration trends, and the government should promote vocational training so that unemployed people can obtain the required qualifications to be employed in different sectors.

Promoting self-employment

In January 2008, 13.8% of foreign workers in Spain were self-employed, whereas the proportion was 18.3% for the whole population. Although self-employment is not yet common among immigrants in Spain, it is becoming an increasing practice – particularly in construction and commerce-related activities – as immigrants feel more stable and settled in the country. The report reveals that, during 2007 alone, the number of foreign workers recorded as self-employed in the social security register grew from 166,032 to 223,597 persons. Due to the rising unemployment rates, it is likely that many foreign workers losing their job will choose to keep working by means of self-employment.

Jessica Duran, IKEI

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