Spain's economic supercycle needs more immigration, says Iturriaga

Iturriaga’s supercycle: fake growth or labor revolution?

José Ramón Iturriaga is convinced: Spain is experiencing the best economic supercycle in 50 years, and to capitalize on it, the country needs more immigration. The Abante fund manager argues that two-thirds of the growth differential with Europe is already explained by the influx of foreign workers. His thesis is simple: without this labor supply, GDP would not shine as brightly as it does. But that very figure, which he uses as an argument for success, triggers alarms among many economic analysts.

The fund manager’s argument

On paper, the reasoning is impeccable. With an aging population and high structural unemployment, Spain needs people who pay into the system. Immigration not only lubricates the productive machinery, he says, but also sustains the pension system. That is the macro view. The problem, skeptics counter, is that growth induced by immigration is not synonymous with development: it counts heads, not productivity. GDP rises, but GDP per capita stagnates. This is the central criticism.

The shadow of 2007

The analogy with 2007 has become commonplace. Back then, the real estate boom masked a low-productivity economy; today, the demographic supercycle does the same. Some go further: it is not a financial bubble, but a people bubble. And like any bubble, they antiestéticar, it will eventually burst. The 2008 bailout, involving €60 billion in public funds injected into banks, is cited as proof that when markets fail, the state pays. The uncomfortable question remains: who will pay when this bubble deflates?

Crossed interests

What stings is not just the economics, but the politics. Some see this defense of immigration as an objective alliance between capital and clientelism: for companies, cheap labor sustaining wage dumping; for the welfare state, new consumers and voters. Executives, critics point out, do not suffer from degraded services or housing competition; that burden falls on rank-and-file workers. Not everyone is a doom-sayer: some recall that the United States grew from 5 million inhabitants in 1800 to 76 million in 1900, and that expansion was the basis of its hegemony. The difference: there, immigration came to produce; here, it ends up in low-skilled sectors.

The supercycle may be real, but the rearview mirror of 2007 should trigger warning lights. If growth relies solely on headcount, without productivity or wage increases, the bill will come due. The question is not how many arrive, but what work they will do and at what price. Iturriaga himself provides a worrying data point: two-thirds of the gap with Europe is explained by inflow, not by a productivity miracle. A bad sign.