The European Commissioner for Jobs and Social Rights Nicolas Schmit recently took part in a summit on job security in Bilbao, where he spoke with Spain’s Labour Minister and Second Deputy Prime Ministers Yolanda Díaz about the state of affairs for workers in the country.
When discussing potential solutions to Spain’s high unemployment rate, Schmit explained “I would not exclude immigration, but when I analyse the data, I see youth unemployment of 30 percent, more than double the European average”.
“The priority for Spain must be to invest in its people,” Schmit continued.
“They must first look at their labour market and find a solution for young people, women and the elderly. They will see later if they need immigrants”.
Despite high unemployment levels which currently amount to three million people, Spain has worker shortages in a wide variety of sectors.
The Spanish government recently changed its immigration laws to make it easier for employers to hire non-EU citizens for sectors with shortages, from waiters to plumbers, whereas previously recruiters were required to prove that they couldn’t find an EU candidate for the job and the skills shortage list was limited and outdated.
In 2023, Spain’s Ministry of Inclusion, Social Security and Migration wants to hire 62,000 third-country workers to cover an array of construction and trades jobs, something the country’s Labour Ministry has not agreed to yet.
The government also recently passed its new startups law to attract foreign investors, digital nomads and talent to the country.
Could Spaniards not be trained to do these jobs as Schmit alludes to? Currently, low wages and unstable working conditions are dissuading many locally trained professionals from staying.
This includes almost 20,000 doctors who have moved abroad in recent years as salaries in other European countries are significantly higher than in Spain, with a newly qualified doctor’s salary only around €1,600 gross per month.
Staff shortages in the health sector are not helped by the fact that foreigners with non-EU qualifications wait for several years for their qualifications to be recognised in Spain through an unnecessarily laborious administrative process known as homologación. This applies to a number of regulated fields, from engineering to dentistry, all of which face shortages.
Spain’s Socialist-led government has partly addressed some of its labour market issues by reducing the rate of temporary contracts and increasing the minimum wage (SMI), but voices within the opposition have accused Sánchez’s administration of “dressing up” the dire reality.
When asked about the rise in minimum wage, Schmit said that he believes “it will not mean significant changes for Spain, which already has a tradition of updating the minimum wage on a regular basis… but the government must take into account factors such as the cost of living and the economic context”.
“Spain must question whether the SMI allows for a decent life or creates poor workers. Its economy cannot be supported by low wages and low productivity,” he continued.
When asked if salaries and inflation have to go hand in hand, Schmit argued “wages must be set by collective bargaining. We are experiencing very high inflation because of the explosion in energy and food prices. If there is a large lag between wages and inflation, there will be an impact on demand and the risk of recession will increase”.
With regards to pensions, Schmit explained: “I don’t think that pensions are very high in Spain and if you leave a gap between the rise in benefits and inflation, you can create a situation of poverty among the elderly. Spain has a disadvantage in that it has one of the fastest-ageing societies… The solution is to modernise the economy to make it more productive and attract more people to the job market”.
Despite these issues, the commissioner acknowledged that the Spanish labour market has surprised many with its resistance this year. “Employment will remain strong if there is no deep recession,” he said.
“The national plan for access to European funds has a good combination of measures to invest in green energy, digitisation, education and public employment services… Spain experienced its economic miracle due to the real estate boom, which exploded, and now it has to transform to go in the right direction”.
According to a report carried out by human resources company Hays on work trends in Spain in 2022, 77 percent of Spaniards surveyed said they would change jobs if they could. Furthermore, 68 percent of them confessed that they are actively looking for another job and the main reason they argue is to get a better salary.
According to Eurostat data from January 2021, 37 percent of Spain’s workforce is overqualified, 17 percent higher than the EU average.