The Government estimates that more than 200,000 migrant workers must arrive per year until 2050 to sustain the welfare state.

The Government believes that Spain requires significant migration support to uphold its current welfare state amidst an aging population that will lead to increased expenses. The Executive acknowledges the estimate proposed by organizations such as the European Commission, IMF, and Airef, which suggests that Spain needs between 200,000 and 250,000 migrants annually until 2050 to sustain the welfare system.

During an informative breakfast hosted by Executive Forum, Minister of Inclusion, Social Security, and Migration, Elma Saiz, emphasized the perspective of migration as an “opportunity” rather than a challenge. Saiz highlighted the contribution of foreign workers to Social Security accounts, noting that they contribute 10% to the system’s income while only consuming 1% of the expenditure. This discrepancy is largely due to the demographic profile of migrants who are typically young individuals in their prime working years.

Saiz also emphasized recent immigration regulation reforms and reported that over the past year and a half, 300,000 work permits have been granted to migrants. Saiz intends to further modify immigration regulations and plans to present a reform proposal in the summer, building upon the work of his predecessor, Jose Luis Escrivá.

Saiz addressed the reported labor shortages faced by companies and highlighted the potential solutions that migration can provide. However, Second Vice President Yolanda Díaz and the unions do not consider the reported vacancies as a significant problem based on statistical data.

While acknowledging the need to increase employability and enhance working conditions for the unemployed, Saiz expressed that recruiting foreign workers within a framework of regular, orderly, and safe migration will also be a government priority.

Message of “tranquility” with pensions

The minister also fielded questions regarding the sustainability of the pension system, which was brought into question in the latest spending projections exercise published by the European Commission and prepared by the Ministry of Economy. The Aging Report identifies Spain as the country that will spend the highest proportion of its GDP on pensions in 2045 and 2070, particularly when the retirement of the baby boom generation places the system under increased stress.

The Commission’s projections hold significant importance as the pension reform approved by Escrivá last year included a closure clause in case spending projections deviated. Airef will certify the existence of such deviation through a report to be presented next year. However, the Commission’s spending projections form the basic assumptions underlying this report.

In response, the minister defended the decision to “revalue and give dignity to pensioners” despite the associated increase in public spending. Saiz also pointed out that the reform approved by Escriva incorporates income measures to counterbalance the spending increase. Saiz argued that Social Security income is growing at an annual rate exceeding 10% due to the significant growth in employment, thereby conveying a message of “calm.” He added that the Aging Report solely focuses on spending and urged consideration of the broader picture, mentioning ongoing efforts to strengthen the labor market.

Although Airef will not present its report until 2025, the independent tax authority has already anticipated that Spain will likely need to make adjustments to the system, amounting to approximately €12 billion in 2024, to comply with Brussels’ requirement of 0.8% of GDP. The final figures will become clear next year if the system closure clause is activated, as is expected.