Spain's population growth halves to 160,000 in six months

The demographic rocket stalls: half the new residents

Population growth in Spain has halved so far this year. Compared to the 600,000 new inhabitants per year recorded in the previous two fiscal years, the first six months of 2024 leave barely 160,000. The data, circulating in economic analysis forums with more irony than surprise, points to a slowdown that some had been expecting for a long time. The recurring cause: housing prices, cost of living, and wages that do not keep up. The rocket, they say, is starting to run short.

The demographic slowdown already noticeable in car registrations

The effect does not stay within resident statistics. In June, private car sales fell by 2% and, without the push from the rental sector, annual registrations would be slightly negative. This is the type of signal analysts read as a thermometer of real household consumption.

Some argue that recent population growth was unsustainable with current wages and that its deceleration is good news. Others see it as a symptom that the model is exhausting itself. What no one disputes is that the pace has broken.

More employment than ever and poverty hitting records

The paradox underpinning the analysis is that of the labor market. Historic employment figures are recorded, but the breakdown raises doubts: inactive fijos discontinuos (seasonal permanent workers), vocational training internships, SEPE courses, and unemployed people over 52 receiving benefits inflate the affiliation count. Criticism focuses on the fact that statistics do not distinguish between working and being registered.

Added to this is the distribution of hours. The number of employed people grows faster than the total of effectively worked hours, pointing to a redistribution of work rather than net creation of full-time jobs. The complete calculation, normalized by active population, gives a much less brilliant picture than the official headline.

Why does social security affiliation rise while public debt also increases?

The question hovering over the analysis is accounting-related: if there are more contributors than ever, why does Social Security need increasingly more funding via debt? The suggested answer is that the average contribution base does not grow at the same rate as affiliates, and that much of the created employment is part-time or subsidized.

In parallel, the public sector expands. It is noted that part of the employment counted as private consists of municipal service contracts — cleaning, gardening, recycling — which live off subsidies. The real private sector, the one competing in the market, does not grow equally.

Consumption sustained by tourism, not by wallets

The most optimistic reading insists that the economy is doing well: full venues, businesses that do not close, movement on the street. The skeptical reading responds that visible consumption is concentrated in tourist areas and high-income zones, while small neighborhood shops fade and empty premises multiply outside city centers.

The debate about who consumes whom also appears: it is pointed out that around 37% of the population supports, in one way or another, the remaining 73% among pensioners, dependents, students, and minors. The macro picture improves; the shopping basket picture, not so much.

The €4,000 minimum wage and other after-dinner fantasies

The discussion turns into a clash of figures regarding what constitutes a decent salary. One current argues that maintaining a family of four requires €4,000 net per month — €1,000 for housing, €1,000 for food, €1,000 for expenses, and €1,000 for savings — and that anything below that is disguised precariousness.

The opposing response recalls that the average net salary in Spain hovers around €2,000 and that setting the SMI (minimum interprofessional wage) at €4,000 does not create wealth, only inflation. The exchange heats up and ends, as almost always, in mutual disqualifications that add not a single new data point.

The country that keeps leading rankings nobody wants

The conclusion of the analysis returns to the starting point. Spain continues to lead OECD lists for unemployment, poverty, inequality, and loss of purchasing power, and the population increase of recent years has not corrected any of those positions. It is argued that 95% of new residents arrive in situations of economic vulnerability, which can hardly improve indicators.

With these elements, the question is not whether the rocket stalls, but how long it will take to definitively lose thrust. And if the demographic slowdown that some celebrate is, in reality, the symptom of something worse?