Immigrant Workers in Spain Earn 38% Less Than Average – elEconomista

Spain’s labour market has increasingly relied on foreign workers to fill key roles and maintain economic momentum, a trend observed particularly in the period following the pandemic. This influx has extended the active workforce and addressed labour shortages, but it has also created a significant wage disparity, with foreign workers earning considerably less than their Spanish counterparts.

The Two-Tiered labour Market

A recent study by Funcas, a Spanish economic research institution, highlights this dynamic. The report reveals that while the incorporation of foreign professionals has spurred Spanish workers toward more productive sectors – particularly in management, scientific, and technical roles – it has simultaneously concentrated foreign workers in lower-paying positions. In 2023, the average annual salary in Spain was €28,049.94, while directors earned nearly €61,000 annually. Conversely, unskilled service workers barely exceeded €15,000 per year, mirroring the minimum wage of €1,080 per month.

Shifting Employment Patterns

Funcas’ research indicates a decline in the number of Spanish workers in elementary occupations, with these roles now almost exclusively filled by foreign labour. This shift has concentrated a larger proportion of workers in less productive sectors, potentially impacting overall national productivity. However, this negative effect is partially offset by the positive contribution of a growing working-age population.

The wage gap, according to the report, stems from the types of jobs foreign workers typically occupy. These positions, particularly for those not from the European Union, often involve lower value-added activities. Several factors contribute to this, including lower levels of formal education, limited savings leading to quicker acceptance of available employment, and potential language barriers impacting workplace productivity.

Educational and Geographic Disparities

The origin of foreign workers also plays a role. Approximately 70% of foreign nationals originating from outside Europe or Latin America have less than a complete secondary education, compared to only 30% of European workers. However, those with qualifications, even if not formally recognized in Spain, demonstrate greater efficiency in their roles. Foreign nationals from Latin America and other EU countries are more frequently found in managerial and executive positions, though Latin Americans also represent a significant portion of the workforce in elementary occupations.

Studies by the Bank of Spain from the early 2000s suggest that Latin American immigrants with Spanish language proficiency demonstrate a more favorable rate of wage assimilation compared to workers from African countries. As foreign workers integrate socially and professionally, their productivity increases, leading to a gradual convergence of wages with those of native-born employees.

Gender Imbalance in labour Participation

The study also reveals a gender gap in labour force participation. While foreign men exhibit similar activity rates to their Spanish counterparts, foreign women demonstrate a different pattern after the age of 35. The activity rate among native Spanish women has increased significantly – by more than 17 percentage points – between the ages of 35 and 44, while the rate for immigrant women has decreased by over five points since 2006.

This divergence results in a double gap for immigrant women: 18% compared to foreign men and 13% compared to Spanish women. Factors contributing to this include lower educational attainment, household composition, societal elements, and potential discrimination in the hiring process. Immigrant women are more likely to have children and be married, and face a “double penalty” in the labour market, particularly when they have children under 16, due to challenges accessing childcare and societal expectations.

Frequently Asked Questions

What is the average salary difference between foreign and Spanish workers?

Foreign workers, on average, earn 38% less than the national average salary in Spain, according to the Funcas study.

Which sectors employ the highest concentration of foreign workers?

Foreign workers are most concentrated in sectors such as primary production, construction, industry, and transportation, often in lower-skilled positions.

How does educational background affect the wages of foreign workers?

Workers from outside Europe and Latin America are more likely to have lower levels of education, which can limit their access to higher-paying jobs and contribute to the wage gap.

As Spain continues to rely on foreign labour, understanding these dynamics will be crucial for fostering a more equitable and productive workforce. What steps could be taken to address the wage disparities and ensure that all workers have opportunities for advancement?