Spain’s Quest for Regular Immigration (ARI) – Rickard Sandell

Spain’s Quest for Regular Immigration (ARI) – Rickard Sandell

Theme: The result of the recent extraordinary regularization campaign suggests that Spanish immigration policies have been extremely inefficient in the past four years. The present analysis tries to quantify the magnitude of the failure as well as identifying ways to prevent the problem of irregular immigration from occurring again in the future.

Summary: This paper argues that the outcome of Spain’s extraordinary regularization campaign, that came to an end on 7 May 2005, indicates that its immigration policies have failed to cater for regular immigration opportunities in the range of around 700,000 people, or possibly 1.1 million if dependants are included. By every measure this tells an important story: there is hardly any doubt that the results of Spanish legislation on immigration are far removed from the legislator’s intentions. It can therefore be argued that the time is ripe for more far-reaching changes in the way Spain has approached its immigration needs. It can be argued that irregular immigration is the result of two related opportunity structures: (1) an excessively relaxed attitude to illegal contracting of irregular immigrants; and (2) an inadequate mechanism to provide for regular immigration opportunities. The Spanish authorities are currently focusing on the first; I contend that there are good reasons to focus on the second.

Analysis: On Saturday 7 May 2005, Spain completed what is probably one of the largest extraordinary regularization campaigns of irregular immigrants worldwide to this date. We have yet to see the final outcome of the process, but close to 700,000 applications have been filed, which indicates that the number of approved applications will be larger than all previous extraordinary regularization campaigns combined in Spain. What is more, once regular status is granted, it can be expected that family members of the newly regularized immigrants will obtain residence permits. The Minister of Labour and Social Affairs has mentioned that as many as 400,000 people could receive a residence permit in this ‘second wave’ of regularization.

While it is probably not difficult to receive many applications for regularization in a country where the stock of irregular immigrants has been estimated in the range of 1 million people, it is the methodology for regularization that makes the number of applications look impressive. The campaign has not really been a campaign targeting irregular immigrants. The primary target has instead been illegal employment of irregular immigrants. What does this mean?

In principle, the process consists of giving any employer interested in legally employing a particular irregular immigrant the opportunity to request the authorities to regularize the immigrant’s situation. That is, it is the employer and not the irregular immigrant that must apply for regularization by means of a formal commitment to employ the irregular immigrant. In the absence of such a commitment an irregular immigrant is not in the position to obtain either a work or a residence permit. Since we can expect that a large proportion of the employers willing to engage in this process already have some form of ‘illegal’ economic relationship with the immigrant they wish to sponsor, the extraordinary regularization campaign has primarily been an extraordinary process to combat the growing black market economy.

Despite criticism from several institutions, and not least from the opposition, the fact is that 700,000 irregular immigrants are in the process of becoming regular immigrants with a legal employment contract and that this is a significant blow to the black market economy. From this point of view it is very hard not to recognise the success of the campaign in combating illegal employment of irregular immigrants and as a consequence of this lower the stock of irregular immigrants in the country. It has also shown that Spanish employers have a strong preference for legally hiring foreign labour instead of illegally when and if they are given an opportunity to access regular immigrant labour.

Given its particular methodology, there are some important lessons to be learnt from the process and particularly from the astonishing results obtained. The objective of Spain’s immigration policy of the past four years has been to effectively provide an adequate number of regular immigrants to satisfy Spanish employers’ needs for foreign labour. The reason is, of course, that immigration is an important human resource that can help generate faster and stronger economic growth and avoid recruitment deficits in occupations that are hampered by staff shortages.

However, if this has been the objective of existing policies on immigration, how is it that Spanish employers are all of a sudden willing to legally contract 700,000 irregular immigrants provided that they are regularized? What is more, how is it that these employers probably relied on the labour services of these 700,000 irregular immigrants in one way or another before the campaign commenced?

Clearly, this sudden demand for regularizing irregular immigrants and to contract them legally is irrefutable evidence that the mechanism for generating regular immigration opportunities to satisfy the demand for immigrant labour has been hopelessly under-dimensioned and extremely inefficient in the past. The equation is simple. If the law and regulations governing provisions for regular immigration had actually complied with the legislators’ aims, no Spanish employer would probably have bothered with the painstaking and time-consuming exercise of regularizing irregular immigrants, since his foreign labour needs would already have been catered for by the available legal mechanism.

The logic of this argument in combination with the particular methodology applied in the campaign suggest that the more irregular immigrants that are regularized the greater is the failure of Spanish immigration policies. We are even in a position to quantify the size of that failure.

If we assume that an irregular immigrant that came to Spain before February 2002 had already regularized his situation by means of the procedure of ‘arraigo laboral’, as laid out in Spanish law, the 700,000 irregular immigrants in process of regularization would have most likely arrived in Spain between 7 February 2002 and 7 August 2004 (the former marking the beginning of the campaign and the latter being the cut-off date for eligibility for regularization –‘arraigo laboral’ basically stipulates that proof of irregular residence in Spain for three consecutive years and the possession of an offer of employment is necessary for entitlement to a work permit. This procedure is virtually identical to that applied in the extraordinary regularization campaign, with the difference that ‘arraigo laboral’ is a permanent and continuous regularization procedure–). This means that over the past two and a half years the real demand from Spanish employers for foreign labour has been 700,000 people, or around 280,000 per year. At the same time, new ‘regular’ immigration per year, through the mechanisms recognised by law hardly accounted for more than 30,000 per year including temporary workers. That is, by and large, Spain’s immigration policies have failed to provide around 250,000 regular immigrant opportunities per year. By any measure this is a considerable failure. As a consequence, faced by the immigration deficit generated by the existing policies, Spanish employers (forced by the circumstances, given their readiness to convert illegal contracts into legal ones when given the opportunity) have in the meantime satisfied their need for immigrant workers by means of illegal contracting of irregular immigrants, with all the negative consequences this type of laissez-faire approach entails.

As is often the case with legislation, it takes time before it can be assessed how well the theoretical assumptions of a law work out when put in practice. Now, five years after the introduction of the existing legal framework for immigration, there is firm evidence that despite the good intentions inherent in the bulk of the current law’s content, the end product is not up to the task of satisfying Spain’s immigration needs in an orderly and regular way. Had the legal framework functioned according to the legislators’ intentions, the regularization campaign would have been unnecessary. Given this undisputable situation, it is probably the right time to consider a different approach to immigration if the cause of irregular immigration is to be eliminated for the future.

Thus, what the government and the opposition, and indeed any actor interested in immigration, should now focus on is not whether or not the extraordinary regularization campaign has been a success or a failure. The present government has simply done what any government would have had to do sooner or later. It has reduced a very significant part of a problem caused by poor legislation. Many will consider that the government chose to come to terms with the problem in perhaps not the most adequate way, but a convincing alternative has yet to be suggested, capable of bringing to the surface around 700,000 jobs in the submerged economy and at the same time eliminating a very significant proportion of the alarmingly large stock of irregular immigrants. Regardless of whether the choice of method was right or not, the issue of method has been given far too much attention. Instead, what should now be addressed is the cause of the problem and how to avoid it in the future. Failing to do so simply means running the risk of needing another extraordinary regularization campaign in the course of just a few years.

Important steps in this direction have already been taken. The greatest difference between the previous situation and how Spain will approach the problem of immigration after the introduction of the new regulations is in the treatment of illegal contracting of irregular immigrants. The idea is that by making it much harder and much more costly to contract irregular immigrants illegally the demand for irregular immigrants should weaken and so should the incentives to immigrate irregularly into Spain. The new strategy will be based on an increase in work-place inspections in combination with the imposition of heavier fines. Experience from other countries suggests that this is an effective way of combating irregular immigration. Hence, if the strategy is implemented successfully irregular immigration should become less frequent. Obviously this is a good thing since there appears to be a political consensus that irregular immigration, and its close relation illegal contracting, should be avoided.

Finally, the new rules on how to implement the law regulating the legal status of foreigners and the procedures for regular immigration also introduce some changes. However, these changes are to a certain extent of only marginal importance, since in practice the regulations only modify the way that the already existing legislation is being implemented. The law itself is still the same and so are the main mechanisms for generating regular immigration. That is, contracting in the country of origin and ‘arraigo laboral’, which for the past four years have been the main mechanisms for regular immigration, are being maintained for the time being with only slight modifications.

The problem is that raising the stakes for illegal contracting is only one side of the coin. Regardless of how successful the government is in combating illegal contracting, such a measure is not addressing the general demand for regular foreign labour.

Assuming the government is 100% successful in implementing its measures for combating illegal contracting, the result would be that Spanish employers would refrain from contracting anyone illegally, whether irregular immigrants or not. This, in turn, should effectively shut out irregular immigrants from the Spanish labour market since they would only be able to access it by means of illegal employment. Under this scenario the only available means for Spanish employers to satisfy their need for contracting foreign labour would be to rely on the existing mechanisms for regular immigration as stipulated in the existing law. Failing to satisfy the demand for contracting regular immigrant labour would lead to one of two possible outcomes:

(1) Spanish enterprises requiring regular immigrant labour but unable to satisfy their needs would be forced to operate below full capacity.
(2) Spanish enterprises requiring regular immigrant labour that are unable to satisfy their needs for such labour but are unwilling to operate below their capacity, would reassess the risk and cost inherent in contracting irregular immigrants illegally, as currently imposed by the Spanish authorities and resume illegal contracting.

Needless to say, both would damage the Spanish economy and the outlook for economic growth. Furthermore the second option would simply imply a return to the situation existing before the regularization campaign started.

Since the mechanisms for regulating regular immigration are by and large the same as in the past four years, the question is: are there any reasons to believe that these methods will be more effective now than they were in the past? I believe that this is not the case. Of course, the yearly contingent for contracts in the country of origin could be adjusted upwards and the number of so-called three-month work-search visas for certain occupations could be raised. But again this could have been done years ago when the problem of irregular immigration started to be a problem and the black market economy began to flourish. However, nothing was done. Why? Elsewhere I have argued at some length that it is the existing mechanism for regular immigration itself that prevents the authorities from correctly assessing the domestic demand for regular immigration (see Inmigración: prioridades para una nueva politica española, Informe del Real Instituto Elcano, 2004).

Contracting in the country of origin, as well as issuing work-search visas limited to certain occupations, will always depend on an assessment of the potential employers’ contractual intentions. This is probably not impossible for highly-skilled occupations for which employers are willing to wait for the right candidate to turn up. But when it comes to the type of occupations to which the majority of Spain’s immigrants aspire –ie, in domestic service, restaurants and hotels, and construction companies–, we are dealing with a highly volatile labour market with occasionally extreme turnover rates, where labour needs have to be resolved from one day to another. Using the authorities as an intermediate broker, assessing contractual needs and at the same time supplying the contractor with the necessary immigrant labour, makes the process inefficient and rigid, while most prospective employers in these sectors have neither the means nor the resources to predict their labour needs for even a short time ahead. Hence, even if there is an explicit demand, it is unlikely to be voiced. The result is that the government ultimately underestimates contractual needs and, consequently, the number of regular immigrants it needs to provide.

Conclusion: The extraordinary regularization campaign provides solid evidence of the failure of Spanish regular immigration practices over the past four years. The main failure is the continuous substantial underestimate in the demand for immigrant labour. I have suggested that the root of this particular problem is the mechanism for generating regular immigration. I have also, implicitly, made it clear that irregular immigration has been made possible by an overly relaxed attitude to the illegal contracting of irregular immigrants.

These two factors are opposite sides of the same coin, and both give rise to increased irregular immigration. Thus, to effectively reduce irregular immigration in the future the authorities need not only consider negative incentives for irregular immigration –as they are currently doing–, they also need to consider providing positive incentives for regular immigration.

Effectively providing for the type of regular immigrant labour which is currently in demand in Spanish society is probably incompatible with the desire to contract immigrants in their countries of origin. The past four years of failure in matching demand with supply is surely more than ample evidence of this.

If the Spanish authorities are serious about providing regular immigration to satisfy domestic demand, it is probably necessary to relax the link between regular immigration opportunities and prior offers of employment. A more effective approach would be to formulate a yearly, or if necessary monthly, immigration target on the basis of a continuous assessment of the Spanish labour market’s capacity to absorb immigrant labour. This would require a system of, for instance, general work-search visas in combination with a thorough follow-up of the progress of job-searching immigrants, preferably through the National Employment Institute (Instituto Nacional de Empleo, INEM). The authorities should concentrate on supplying immigrant labour instead of providing immigrant labour opportunities, as is currently the case. For obvious reasons the follow-up should also be designed in such a way that it considers solutions for those who fail to integrate into the Spanish labour market, such as organised repatriation on expiry of the visa.

To conclude, only by making irregular immigration and illegal contracting of irregular immigrants more difficult, and by making regular immigration easier and more accessible for potential immigrants, can we hope to prevent the phenomenon of irregular immigration in the future, while at the same time satisfying the demand for immigrant labour necessary to provide better conditions for economic growth.