Else Beekman
Spain has been aging for years and the aging of the population will not stop anytime soon. To maintain the current ratio of workers to pensioners, almost 25 million migrants will be needed by 2053, the Spanish Central Bank estimates. Because anyone who has saved for a pension all their life wants to receive it when the time comes.
Millions of baby boomers currently working and contributing to the national treasury will retire in the coming decades. The generation that will replace them in the labour market is much smaller in size, but will have to pay all social security contributions to pay the pensions of the generations that preceded them.
Drastic changes needed
According to the latest forecasts from the Spanish National Institute of Statistics (INE), the ratio of workers to retirees will fall from 3.8 per retiree to 2.1 workers per retiree in 2053. It seems utopian to maintain the current ratio of almost four to one, according to the Bank of Spain. It estimates that in 30 years, 24.7 million more working-age migrants will be needed than is currently expected. But so many new residents in just under 30 years seems impossible. Each year, 1.3 million net migrants (including departing people) would have to enter the country.
Migration as a partial solution
The challenge of attracting a net 1.3 million migrants to Spain every year seems almost impossible. That number far exceeds historical migration figures. By comparison, between 2002 and 2022 the net number of new arrivals was five million, five times less than what would be needed. In 2023, Spain received 536,852 undocumented migrants, which was 82% more than in 2022. The Bank of Spain predicts that even a significant increase in migration will not be enough to balance the labour market or combat population aging.
Future labour market and pension system
The aging population will also affect the labour market. Migration can help limit the effects of this, but it is not a panacea. Many migrants lack the qualifications for jobs in sectors that will grow, such as digital and sustainable transformation. Without major changes in migration flows, it seems unlikely that these alone will solve the future mismatch between supply and demand in the Spanish labour market. This points to a future where the public pension system will inevitably have to be supported with fewer workers.
Paradox
While companies in many sectors in Spain are currently struggling to fill vacancies, the legislative initiative (ILP) ‘Regularización Ya’ estimates that 500,000 migrants are currently in an irregular administrative situation. This situation makes them invisible and deprives them of access to fundamental rights, while at the same time they cannot legally work while their children are growing up in Spain. But they too will one day reach retirement age, and what then? Who will take care of them? Or should they return to their country of origin where they no longer have anyone, because their children and grandchildren are in Spain?
Massive regularisation
A possible mass regularisation could provide a solution. The procedure initiated by Regularización Ya to this end was recently approved in the Spanish Parliament, after two years of work and with great social support from 900 organisations that have joined and the signature of 700,000 Spanish citizens. All parties except Vox voted in favour. The government is confident that the regularisation of illegal migrants will increase employment and income. The procedure may take months if not years. In the meantime, the EU recently approved the Migration Pact on April 10, which aims to stem migration flows.
Illegal workers
Of all the migrants not regularly residing in Spain, many are working. However, they are only eligible for ‘black’ jobs and often fall prey to exploitation. The organisation porCausa focuses on investigative journalism in the field of immigration. Their figures show that the majority of people with illegal immigration status in Spain do not come from Africa, but from Latin America. The majority of that group consists of women, young people and children. Most of them work undeclared in the elderly care sector. This group would benefit most from any mass regulation. Of all undocumented foreigners in Spain, only 11% are African according to the same organisation. The majority of adults from this group is employed in home-based activities (27% of informal employment) and hospitality (24%), followed by manufacturing, healthcare and social services.
Skilled and unskilled work
While Spain is trying to attract talent and qualified people, it also has a huge need for unskilled labour. In agriculture, for example, there is a major labour shortage. Spaniards generally do not want to work in that sector. In addition, the service sector and the catering industry in particular need people and are now increasingly, since the recovery after the pandemic, back in construction.
Contribution to treasury
While many people are afraid that migrant workers will take something from them, PorCausa calculated that regularisation means a tax contribution of €3,250 per year per migrant worker. Added up, this would amount to a cumulative net amount per year of between €790 and €950 million. After regularisation, migrants would pay social security contributions and taxes and therefore also build up a pension. This means that the tax base for the entire Hispanic community increases.
Previous mass regularisations
The initiative of Regularización Ya offers hope for the people who currently reside or even work illegally in Spain. Although the process may take a long time, the past shows that there are possibilities. Spain has already carried out nine regularisations of foreigners, five promoted by the Partido Popular and four by the PSOE, the last in 2005.
Doubts
There are also doubts. Because how many people are really in an irregular situation in Spain? Counting ‘invisible’ people is difficult. And how great is the risk of a pull effect, as Vox argues? When will the regularisation come into effect? Does this also apply to all migrants who are now entering the country? Answers to these questions are currently also lacking from the relevant Ministries of Labour and Social Security and Migration.
Also read: Significant increase in illegal migrants in Spain in the first quarter of this year