The role of immigration in the current expansionary cycle has been more significant, but also less automatic, than commonly admitted. It is not just that, year after year, foreigners contribute with almost two out of three new entries to the labor market: the key is that this workforce supports the activity of sectors that are facing galloping demand, alleviating the situation of shortage or demobilization of the Spanish workforce, taking into account the level of wages in force.
The specificity of shock The Spanish demographic situation, and its corollary increase in labor supply, is that it has coincided with strong latent demand. 75% of the jobs generated in the last year by hospitality and other tourism-related activities are occupied by immigrants. In other words, immigration served as leverage to break a new record in international tourism revenue. But if the increase in the workforce has had such a powerful and immediate impact – equally surprising is the prompt integration of immigrants – it is because it has been simultaneous with strong demand, fueled by a desire to travel repressed during the pandemic.
More forcefully, the ongoing recovery in housing construction would be inconceivable without the use of foreign labor. Proof of this dependency: 68% of new hires in the construction industry over the past year were immigrants. Now, it is likely that these same people would not have found work in a recessionary environment, such as the one that prevailed after the bursting of the real estate bubble, resulting in a wave of immigrants returning to their countries of origin. This circumstance also explains the difficulties of integrating foreigners in economies undergoing structural adjustment such as Germany, or which suffer from a competitiveness deficit such as France.
Furthermore, immigration has complemented, if not promoted, national immigration. Foreign labor-intensive sectors, such as logistics and business services with below-average wages, are part of the supply chain and are therefore crucial to the proper functioning of the economy as a whole. All this has facilitated the growth of the sectors that generate the majority of Spanish worker hires. For example, professional activities, education and healthcare provide almost 60% of the new jobs occupied by Spaniards in the last period.
However, it would be foolish to anticipate the perpetuation of a virtuous circle of this type. The benefits of population growth do not occur automatically, as the supply of additional labor may not match demand in the near future (or at least not immediately). Moderation in tourism predicts a downturn in the labor market, regardless of the entry of immigrants seeking work into the sector.
In addition to the existence of solvent demand, another condition for the integration of the workforce, whether national or foreign, is the availability of sufficient production capacity to support the activity. In this regard, the weakness of business investments is worrying, especially in sectors that are already operating at full capacity and which, therefore, do not have idle equipment to expand the workforce.
In short, immigration expands the margin of action of economic policy, but does not replace it. We still need to encourage the return to work of the unemployed, whether national or foreign: it is not understandable that, in the midst of a boom, 173,000 unemployed people from the construction industry are unable to find work. And the migration phenomenon makes it a priority to address obstacles to investment and productivity, in support of general well-being.
Affiliation
The labor market maintains its dynamism, based on the increase in affiliation by 46,000 people in October, coinciding with a decrease in registered unemployment by 11,000 people in the same month (in both cases, in seasonally adjusted terms by Funcas). The affiliation of foreign workers stands out, which this year has recorded an annual growth of more than 8%, even detecting an acceleration in the last two months. In the cumulative total of 2025, immigration provided the majority of new jobs created in thriving sectors such as construction or hospitality.
