AS THE downturn in the Spanish economy starts to bite, the first and worst affected are the immigrants who have flooded the country over the last 10 years, according to experts.
Latin Americans, Africans and East Europeans have flocked to Spain in recent years to fill the enormous gap in the labour market caused by Spain’s economic boom.
But a strong downturn in the country’s construction and real estate industry is beginning to trigger massive layoffs and it is the immigrants who are bearing the brunt.
Spanish unemployment rose to an 18-month high at the end of last year and is fast approaching the two million mark, leaving the socialist government with a massive headache ahead of elections in March.
The unemployment rate rose to 8.6 per cent in the fourth quarter from 8.3 per cent in the third as the country’s construction industry slowed far more quickly than analysts expected.
The bad news comes from the National Statistics Institute and followed a rise in inflation in December, taking it to a 12-month high.
The news has knocked consumer confidence as Spaniards are being hit by a triple shock of falling house prices, higher interest rates and soaring food prices.
Most immigrants are working on temporary contracts so are more easily laid off than Spanish workers on indefinite contracts, who would be entitled to big redundancy payouts.
However, on the downside, immigrants on temporary contracts tend to be paid less and the employers’ national insurance contributions are correspondingly lower.
Government figures show that immigrants as a group are younger and better educated than native Spaniards in the job market.
In the past Spain has considered itself fortunate to have a ready supply of workers to fill gaps in areas like construction and a large labour pool helped employers keep a lid on wage demands.
As to the affect the rise in unemployment will have socially, only time will tell. New unemployment figures are due out in the coming weeks but the full story won’t unfold until later in the year.
Figures available up to the end of last year would suggest prime minister José Luis Rodríguez Zapatero has his back against the wall going into March’s general election.
And if the economic downturn leads to competition for jobs between Spaniards and immigrants, the government could find its liberal policy toward immigration comes back to bite it in the backside.