Economic migrants and the labour market in Spain and Portugal

Within the last fifteen years Spain and Portugal have begun to experience a phenomenon that occurred in northern Europe three or four decades earlier. Rising prosperity, an ageing population, and growing labour shortages have triggered a demand for foreign labour in the Iberian economies. This survey article identifies the changing trends and developments of recent immigration to two southern European countries, and the problems of labour market integration. It compares and contrasts the insertion process in Spain and Portugal and highlights the policy dilemma that, like most of the rest of the EU, the Iberian economies require immigrant workers, but have yet to develop effective mechanisms for integrating them. It argues that the labour market is not only the principal mechanism by which immigrants are integrated, but is beginning to transform attitudes towards immigration. Employer organizations have played a lead role in pressing for a shift from restriction and control to the management of immigrant integration. However, the needs of employers, who require a supply of cheap, flexible labour clashes with the government's exclusion policy, as the case study based on Lorca, Spain demonstrates.