Spain's GDP Paradox: Why 90,000 Bars Won't Save the Economy

The GDP Sánchez wants to save with immigration: 90,000 bars and 50,000 classrooms

In a recent intervention, Prime Minister Pedro Sánchez defended immigration as a pillar for economic growth, citing projections that point to a 19% drop in GDP by 2050 and a 22% drop by 2075 without it. The argument, however, has clashed with a more skeptical analysis that questions the metric used: total GDP versus GDP per capita.

The GDP metric: total vs per capita

The most repeated criticism is that total GDP can grow with more population, but it does not reflect individual well-being. If millions of people are imported, aggregate GDP rises, but GDP per capita can stagnate or even fall. That is, the country would be richer in absolute terms, but each citizen could be poorer. This distinction is key to understanding the skepticism.

The bar business: what is really lost?

Sánchez cited that without immigration, 90,000 bars would have to close. But Spain has a unique density of bars: an average of one bar for every 175 inhabitants, with about 250,000 bars in total. Closing 90,000 would leave 160,000, which would still be a record figure. Furthermore, it is argued that many of these bars are low value-added businesses that only survive with cheap labor, and that their closure could free up premises for other more productive uses.

The cost of education and immigration

Another focus of the debate is the fiscal cost of immigration. It is estimated that keeping a primary or secondary school student costs between 6,000 and 8,000 euros annually. A birth can cost between 3,000 and 6,000 euros, up to 9,000 if it is a cesarean section. Adding primary education, the expenditure per foreign child can exceed 40,000 euros. The question is whether the taxes paid by immigrants cover this cost, and many analyses maintain that they do not.

• Annual cost of a student: 6,000-8,000 euros
• Cost of a vaginal birth: 3,000-6,000 euros
• Cost of a cesarean section: up to 9,000 euros
• Total expenditure per foreign child (birth + primary): 40,000-50,000 euros

The pension trap and the economic model

It has been pointed out that immigration was initially justified as a solution for pensions, but the argument has changed: now it is said that immigrants are new Spaniards who contribute. However, if they work in low-productivity jobs, their contributions will not be sufficient to sustain the system. Furthermore, the Spanish economic model is based on low value-added services, such as hospitality, which depend on low wages. That is the model that needs immigration to keep functioning, but it is not sustainable in the long term.

The false dilemma: is immigration the only solution?

Some argue that it is a false dilemma. If after 30 years of immigration and bringing in 2 million people in a few months, waiter or teacher positions remain unfilled, the solution was never immigration. Other causes are pointed out: bureaucracy, low salaries, preference for public employment, or lack of incentives. Mass immigration can be a patch, not a solution.

The question that remains unanswered is whether GDP per capita would improve with a smaller population, and whether the economic model based on low value-added services is sustainable in the long term. The debate remains open, and the available data does not close the issue.