Seeing the low birth rate, the aging of the population and the limited effect of the measures applied by the Spanish Government, the Bank of Spain can only think of one solution to sustain pensions and avoid imbalances in the labor market: triple the ‘anticipated arrival of immigrants for the next 30 years, which would be equivalent to incorporating 24.6 million foreigners in this period of time.
As indicated by the institution in the annual report, “the group born abroad of working age should be three times larger than what the INE predicts in the most recent population projections”. It refers to the latest estimates from the statistics institute, according to which immigration will bring 10 million more inhabitants to Spain until 2053.
To arrive at the figure of 24.6 million immigrants, the Bank of Spain makes its own reasoning. In 2053, it would be necessary to maintain a ratio in which the amount of retirees was equivalent to 26% of people of working age. Retirees will then be 14.8 million, so 55.6 million people between 16 and 66 will be needed to support them.
However, in 2053 there would not be enough people. Those born in Spain of working age would barely be 18.8 million, to which 12.2 million foreigners would be added. They would add up to 31 million. 24.6 million would be missing for the accounts to come out.
The general director of economics and statistics of the Bank of Spain, Ángel Gavilán, explained that the net arrival of foreigners, equivalent to five million people between 2002 and 2022, has become “the only source of growth of the resident population in Spain”. Meanwhile, Spain statistically shows the lowest birth rates of the surrounding countries and one of the highest life expectancies.
The report reaches other conclusions regarding the sustainability of pensions. One is that the Spanish Government’s incentives to extend working life are not enough, since they will barely reduce the costs of the system. Another is that the possible increases in Social Security contributions from 2025, if they are to be applied due to the activation of the closure clause, will have detrimental effects on the labor market.
The latest pension reform includes a safeguard clause which, in the event of imbalances, provides for increases in Social Security contributions from 2025. The Bank of Spain calculates that for every increase of one percentage point these quotas will result in the loss of 50,000 jobs after four years. In this way, if this clause is to be activated and quotas are increased, it will have a direct consequence in the loss of jobs.
