Spain's economic growth outperforms its European neighbors helped by immigrant labor bridging job market gaps, news agency Reuters reported on Wednesday (April 24).

Data from the Spanish statistical office reveals that the county's GDP overall growth in 2023 was roughly 2%, outpacing the growth in the Eurozone which staggered behind at about 0.7%.

While data attributed Spain's stunning economic performance to the country's initiatives in digitalization as well as growth in investments and private consumption, another factor that propelled the country's growth was immigrant labor.

Citing data from Funcas, a Madrid-based economic think tank, Reuters reported that immigration accounted for 64% of new jobs created and half of Spain's economic growth in 2023.

Spain's unemployment rate registered at 11.8%. It is still the highest in Europe, but it is the lowest it has been since 2007.

Spain's immigrant labor force

Research data reveals that the foreign-born population in Spain now accounts for 18%, the average in the EU being 13%. Meanwhile, 39% of new citizens were born in Latin America, according to Funcas.

While immigrant labor traditionally filled low-wage roles like construction and domestic work, there has been a notable shift. Job growth for migrants is now seen in technology and science, doubling to 109,000 since 2018. Additionally, hospitality jobs for immigrants increased by 30% to 525,000 in 2023 from 2007.

Many migrants from Latin America find the Spanish job market attractive due to their shared history and language. Spain's recognition of certain Latin American educational qualifications has aided immigrant integration, a contrast to challenges faced in countries like Germany.

Read more: Spanish government eases route to work for undocumented migrants

Integrating skilled labor immigrants

However, challenges remain for Spain's immigrant population. According to research by the Elcano Royal Institute, a Madrid-based research organization, immigrants in Spain tend to work in industries with lower productivity and poorer employment conditions compared to Spanish nationals. Except for construction and certain agricultural sectors like meat processing, immigrant participation in the most productive economic sectors such as banking, research, and industry remain low.

This extends to salaries, with immigrants, particularly those from countries outside the European Union (non-EU countries), earning significantly less than their Spanish counterparts, with the gap even wider for women.

The employment rates for immigrants, particularly those aged 25 to 64, are lower compared to Spanish nationals, leading to higher unemployment rates among immigrant communities, according to the INE Active Population Survey conducted at the end of 2023. Male non-EU immigrants have an unemployment rate of 15%, significantly higher than Spanish men (10%) and men from other EU countries (11%). The gap is even more pronounced for women, with non-EU immigrant women facing an unemployment rate of 22% compared to 12% for Spanish women, the survey found.

This combination of lower employment rates and concentration in low-paying jobs contributes to a significant portion of the immigrant population being at risk of poverty or experiencing material deprivation. Citing the latest Living Conditions Survey, the Elcano Royal Institute noted that a staggering 53% of non-EU immigrants residing in Spain were at risk of poverty in 2022, compared to only 16% of Spaniards.

A public opinion poll published by Statistica last month showed that 46% of Spaniards did not believe that immigrants take jobs away from the country’s nationals. Additionally, 36% of Spaniards do not think that their country would be stronger if it stopped immigration.

Read more: Spain: Parliament votes to consider regularizing undocumented migrants

With Reuters