Spain’s booming economy relies on migrants. Now they threaten a political earthquake

The government unleashes an unprecedented wave of immigration to fill blue-collar jobs that natives won’t do. But worried natives see public services being overwhelmed, and rents and house prices climbing out of reach.

Opposition parties call for a points-based immigration system. Meanwhile, the government struggles to get on top of irregular yet relentless migrant boat arrivals.

Anti-migrant protests break out, sometimes violent. An insurgent political party makes the running on immigration, putting mainstream politicians on the back foot.

This sounds a lot like post-pandemic Britain. But there’s another European country where the same tale seems to be unfolding: Spain.

It’s a story that has surprised everyone, not least the Spanish themselves.

Every other European country’s voters have at least flirted with anti-immigrant politics, and even occasionally propelled populists into power. But Spain has long remained an impregnable bastion of liberal attitudes on the issue.

In just the past four years, Spain, a country of about 49 million people, has opened its door to more than two million migrants. Many simply turn up and start working with barely a visa to be seen, let alone a points-based system.

This immigrant influx has fuelled an economic boom that is the envy of northern Europe. While France, Germany and Italy can’t even manage an annual GDP growth rate of 1pc, Spain – the Continent’s fourth-largest economy – is motoring along at close to 3pc.

But just as Britain’s ‘Boriswave’ of migrants lifted immigration back to the forefront of national consciousness, socialist Prime Minister Pedro Sánchez’s remarkable open door policy has ushered in what could be a sea change in attitudes – and with it, the rise of a clutch of plain-speaking populists who articulate and amplify the grievance.

“In Britain the economy is quite stagnant, so you can almost understand why there is discontent, whereas in Spain growth is very strong. But I can tell you that I live in Britain and I’m from Spain, and the feeling in both countries sometimes seems quite similar,” says Angel Talavera, an analyst at Oxford Economics.

Some features of Spain’s immigration story are unique. Its migration patterns are unusual, drawing heavily on Spanish-speaking Catholics from Latin America, and Sánchez’s trenchant liberalism is increasingly rare among European political leaders.

But the use of migration to plug worker shortages, and to forestall the rapid ageing of the population, is all too familiar – as are the political consequences.

One Spanish town experienced anti-immigrant riots in the summer. On a beach, sunbathers pushed a migrant boat back to sea. Some see these as isolated incidents, others as tremors that signal a potential political earthquake.

The populist Vox Party is polling at record levels, and demanding forced repatriations. The conservative People’s Party, which would likely need Vox to form government after a future election, is having to take a harder line.

And there’s even a new fringe party on the radical Right, which is run – in now textbook fashion – by a charismatic millennial politician, Alvise Pérez, who dresses nattily and has nailed social media.

The ingredients are all in place for Spain’s migration-fuelled economic miracle to turn sour.

Migration builds the boom

It was a good boom. In the mid-2010s Spain painfully rebuilt its public finances and economy from the ashes of the 2012 eurozone crisis. This gave it a platform for lift-off during the world’s post-pandemic economic rebound.

Liberated from lockdowns in 2021, tourists began flocking to Spain in droves. The country had a record 94 million visitors last year, bringing bumper business to the retail and hospitality trades.

Brussels is lavishing €163bn (£143bn) of the EU’s pandemic recovery funds on Spain, topped up by further largesse from the government in Madrid. The country’s buoyant banks have also come to the party, dishing out credit more freely than before the pandemic.

Abundant solar and wind power kept energy prices lower than elsewhere after Russia invaded Ukraine, giving manufacturing a boost.

The unemployment rate has dipped to a 17-year low of 10pc (albeit, that is still more than double the rate in Britain). The economy expanded at an annual pace of 2.8pc in the third quarter, sustaining a two-year run of growth at or near 3pc.

With Germany and France still anaemic, the government reckons Spain accounted for 40pc of all growth in the 20-country eurozone last year.

Besides its singular reliance on tourism, Spain’s ability to pull ahead of the eurozone pack came from its embrace of mass migration.

The country allowed in almost 730,000 migrants in 2022 and more than 640,000 in 2023. Population data suggests at least another 350,000 arrived last year. Airef, Spain’s independent fiscal authority, forecasts net migration of 625,000 this year.

The Spanish central bank estimates that this added between 0.4 and 0.7 percentage points to annual GDP growth in each of the past three years, accounting for a large chunk of the difference between Spain and its European peers.

“Migration and growth, they have a relationship that goes both ways,” says Talavera. “More people coming to the country is part of the reason why Spain is growing more. But also, when countries grow more, they attract more migrants. It’s a self-reinforcing cycle.”

About half of Spain’s migrants originate from its former colonies in South America. This means it could be a Trump-reinforced cycle as well. The US president’s crackdown on migrants will probably divert more Latin American emigrants towards Spain’s warmer embrace.

The jobs Spaniards don’t want

It’s an openly acknowledged practice that when Latin Americans arrive in Spain, often just on a tourist visa, many or most don’t apply for residence permits or work visas. They simply pick up no-questions-asked jobs as cleaners and carers, or at farms, building sites, cafes and restaurants.

They don’t pay taxes and aren’t entitled to welfare benefits, but they will register with their municipality and get access to public schools and hospitals.

After three years, if they have a job, or meet one of several other criteria, they can apply for what is known as arraigo (which literally translates as “roots”, but is referred to in English as “regularisation”): official acknowledgement of their residence in Spain, and the rights that go with it.

The Sánchez government has just promulgated new rules to make it easier to get these benefits. The wait is now only two years and the process is smoother. The plan is to regularise 900,000 more migrants in the next three years.

The government has suggested it needs to import up to 300,000 people a year to protect its tax base from the effect of an ageing population.

Spain’s fertility rate of 1.12 is one of the lowest in Europe, and already one-fifth of Spaniards are aged over 65.

“If we do nothing, in 25 years we will have a much smaller workforce, which would mean that the potential growth of our economy would fall from 2pc to 0.1pc. Tell me how we would finance the welfare state, pensions for our seniors, healthcare or education?” Sánchez recently said.

The immediate problem is a shortage of workers willing to do unskilled jobs. On some estimates, immigrants took up to 90pc of the jobs that were created in Spain last year. Migrants represent up to three-quarters of employment in domestic service, 45pc in hospitality, and almost one-third in both construction and agriculture.

Elma Saiz Delgado, Spain’s migration minister, recently said that economic growth would drop by a quarter if Spain did not sustain its inflow of migrant manpower.

Luis Cortés is a farmer in Vegas del Guadiana, in the south-western Extremadura region. He needs farmhands to harvest his crops of grapes, olives, tomatoes and fruits, but struggles to find willing workers.

“The people of Extremadura will not do this work, despite the fact that unemployment is 20pc in this region. I have to recruit immigrants, typically from Morocco and Latin America,” he says.

“Right now we are pruning trees before the winter and I cannot find anyone with experience. I have two Moroccans on the job and I am training them as we go. If I could find more workers, I would plant more trees than I actually have, but there is no point if you can’t keep up with the work.”

Rogelio Salazar, an Ecuadorian-born 50-year-old who owns a bar in Madrid, was one of those Latin Americans who arrived without a visa, albeit more than two decades ago, and worked in the shadows.

“Without papers, you are exploited. I lived in a three-bedroom apartment with 12 people and went hungry,” he recalls.

“After four months I got a job on a building site – for a pittance, but I couldn’t lose it. I remember cutting my hand one day on a piece of iron and hiding the wound from the boss so he wouldn’t send me home.”

In 2005 a previous socialist prime minister, Jose Luis Roriguez Zapatero, did a mass regularisation. Salazar took part, and by 2008 he was a Spanish citizen.

But his story highlights the attraction that some industries feel towards migrant workers: they are unprotected and they are cheap.

Carmen González Enríquez, a researcher at Spanish think tank the Elcano Royal Institute, says that while Spaniards earn an average salary of €2,275 a month, migrants who hail from countries poorer than Spain earn €1,743.

Home truths

Wage growth has been consistently lower in Spain over the past few years than the eurozone average. In the most recent quarter, Spain’s annual wage increase was 2.7pc, versus 3.7pc across the currency bloc.

Inflation, on the other hand, is a percentage point higher in Spain than in the wider eurozone. This leaves Spaniards feeling the pinch, as prices climb faster than incomes. The cost of living crisis that has started to abate elsewhere is still alive and well.

The most acute pressure point is housing.

Surging demand from both migrants and tourists using AirBnB has run headlong into a supply slowdown. The eurozone crash sent property prices plummeting and put construction on hold. The Bank of Spain estimates that there’s a gap of up to 700,000 homes between supply and demand.

House prices have jumped by one-third in the past five years. Polls suggest housing affordability is the biggest issue on voters’ minds.

“There has been a shortage of good quality property here for a long time, and part of that is due to the planning, and the amount of time that it can take to get a building licence,” says Luke Davis, a Marbella-based buyers’ agent for Property Vision International.

The government is looking at investments in affordable housing, but its main tactic seems to be taxing wealthy expats who buy second homes, and cracking down on short-term tourist rentals. But Spanish taxes on home ownership are already among the highest in the EU.

Juan Jiménez, a 20-year-old IT engineering student at Madrid’s Polytechnic University, says he’s resigned to either living at home or moving abroad.

“In theory with my studies, I would be in the market for a good job. But the abusive level of prices of accommodation means I won’t be able to both pay rent and save to buy something,” he says.

“If I stay at home, maybe, with luck I will be able to make a down payment on a home when I am 30. But I think I am likely to go abroad to a country where the standard of living is better.

“In five years’ time I am sure that my spending power will be much less than that of my parents when they were 25.”

The other inevitable consequence of a surge in population is stress on public services. After the eurozone crisis, successive Spanish governments had to put the brakes on public spending just as migrant-enhanced demand for school places and medical appointments began to build.

Elcano’s González says ordinary Spaniards are noticing the changes. “People see that for instance, if they ask for a grant for their children to have free lunch at school, the children of migrants will probably get those grants instead of them, because those grants take into account income.”

Supercharged migration isn’t the only reason that prices are growing faster than wages, or that public services are shrinking and housing costs are soaring.

But politics likes to trade in scapegoats. Migration is a visible target, and a new and buoyant political force has the issue in its sights.

Hard-Right backlash

Migration has scurried quickly up the country’s political agenda. Two years ago, just 8pc of respondents to a flagship monthly survey by Spain’s Centre for Sociological Research (CIS) named immigration as one of the country’s most pressing concerns.

By October last year, immigration had become the top issue, with 28pc citing it among the country’s three biggest concerns. In the most recent barometer, it ranked second behind housing.

The immediate trigger seems to have been the more visible faced of migration: the boats of irregular arrivals who pitch up mostly in the Canary Islands or the Balearics.

The number jumped 10pc to 61,000 in 2024, including a 17pc surge on to the Canary Islands, mostly crossing from Mauritania, Morocco and Senegal.

The flow has eased this year, with the interior ministry reporting a one third decline in arrivals in the first 10 months compared with the same period a year earlier.

The Sánchez government has claimed success for its strategy of working with the African source countries to open up legitimate migration pathways and prevent the use of boats.

But the sense of an uncontrolled migrant flow, and one that does not resemble the Latin American migration profile to which Spain is accustomed, has caused lingering unease. A recent Sigma Dos poll found 70pc of usually welcoming Spaniards backed the deportation of illegal immigrants.

This feeling was crystallised in a video that went viral over the summer, where Granada beachgoers tried to push a boat back into the sea, and in televised scenes of an ugly riot in the south-eastern farming town of Torre-Pacheco.

After a man in his 60s there was attacked by two foreigners – in a town where one third of the 40,000 inhabitants are ethnic, and local farms rely on migrant labour – dozens of people rioted and clashed with police for several nights running.

Saiz, the migration minister, made it clear whose side she was on. “Spain is not a country that hunts down immigrants, and if we have to take to the streets, it is to defend the rights of thousands of people who are completely trapped and distressed by this hunt for immigrants,” she told El Pais newspaper.

A French TV reporter toured the town and found people willing to put across the contrary point of view.

“Anybody who doesn’t adapt should be sent back to their own country,” one local said. “If they are spending their time on theft and they get caught, send them out. If they are Spanish, send them to jail,” said another.

The regional leader of the Vox Party, José Ángel Antelo, was equally outspoken. “All the violence experienced in Torre Pacheco is the fault of the [conservative party] PP and the [socialist party] PSOE for financing and filling our streets with illegal immigration,” he said. “With Vox, deportations, security and peace in our neighbourhoods.”

Vox was not conceived as an anti-immigrant or nativist party. It began as a nationalist breakaway group from the PP in 2013, with its founders frustrated at Madrid’s increasing tolerance for separatist movements in regions like Catalonia.

Slowly it became a magnet for anti-establishment feeling, with disaffected young men gravitating towards it. More than one third of Spanish men under the age of 24 say they’ll vote for Vox at the next election, expected in 2027.

Vox has gradually accumulated seats and influence since initially breaking into the Andalucían parliament in 2018. Its bid to capitalise on the rising disquiet over immigration has become increasingly central to its message.

In June it launched an economic and housing policy that included demands to repatriate immigrants who had not integrated, deport illegal migrants and constrict the routes into the country.

Vox’s polling has picked up since the summer, rising from a typical score of 15pc or 16pc to something closer to 20pc.

The party’s implicit target is more the growing cohort of African migrants than the linguistically and religiously familiar Latin Americans.

At a rally in late September, Vox’s combative 49-year-old leader Santiago Abascal railed against “Islamist invasion”, “climatic terrorism” and “woke ideology”, as his cheering supporters waved Spanish flags.

The party’s muscular populism has been further amplified by the arrival of an even punchier right-wing figure, Alvise Pérez.

The social media-savvy 35-year-old firebrand has formed a party called SALF (an acronym for the Spanish phrase “the party is over”), and won a seat in the European Parliament in June.

Pérez’s support has dipped since then, but all this has sparked concern and confusion within the mainstream PP, which is polling between 29pc and 32pc, compared with Sánchez’s socialists on about 28pc.

Juan Iglesias, a professor at Comillas University of Madrid, says the PP and PSOE had previously tacitly avoided sparring over immigration, because of Spain’s economic dependency on its foreign workforce.

“They create this kind of agreement in the political arena not to use immigration as a political weapon. But that was broken by Vox.”

PP leader Alberto Núñez Feijóo has now had to don Vox’s clothes. He recently unveiled a batch of policies aimed at tightening up migration, spiced with unusually tough rhetoric.

“Spanish nationality isn’t given away, it’s earned,” he said. “We will never defend an immigration policy that turns entire neighbourhoods of our country into unrecognisable places.”

Not everyone is convinced by this new politics, though. CIS researcher Albert Arcarons says more than 50pc of people still agree with the proposition that immigration makes Spain a better place to live. He sees Vox’s rhetoric, amplified by the media, as more a caricature of mainstream Spanish views than an accurate picture.

But he concedes that Vox’s entry into regional and national parliaments has the potential to “legitimise” anti-immigrant discourses, and could be “a turning point”. One quarter of Spaniards in a recent poll said Vox was the party they most trusted on immigration.

Arcarons says CIS is keen to work out whether Vox is articulating and legitimising views that Spanish people already hold – but which they may be too shy to tell pollsters – or whether the party is in fact fomenting more widespread take-up of these views.

If Vox does create a groundswell, and if it steers the PP towards a tougher stance, then Spain faces a fundamental challenge: it will have to rethink its whole economic model.

Oxford Economics’ Talavera says the backlash against migration will probably temper Spain’s economic boom in coming years. But finding a new basis for growth looks a daunting task.

“It’s very difficult to go from a services economy, focused on tourism, to becoming a country that could be an AI power or something like that. Those things take a lot of time, they take a lot of investment,” he says.

There have been “pockets of success”, such as the car industry and the clean energy sector. “But it would be very difficult for Spain to become Germany or Korea overnight. That just isn’t going to happen.”

The latest polls suggest the PP would need Vox’s support to form the next government. But the same polls also suggest there could be an expiry date on Sánchez’s liberal regime and the Spanish tradition it represents.

[Source: Daily Telegraph]