Austerity programmes, labor market reform and the politics of immigration in Spain

This paper explores the impact of external demands for decisive labor market reform (such as was delivered by the Rajoy government in February 2012) combined with simultaneous spending cuts demanded by Europe on recent political developments in Spain. The constitutional crisis involving Catalonia is one such development. Less well known has been the impact of the austerity program on the politics of immigration in Spain and the growing politicization of immigration by political parties (Popular Party, regional nationalists). In the decade up to the crisis, Spain experienced a rise in labor market participation, changes in the structure of the welfare state that helped to participation, and a liberal immigration regime that resulted in a demographic boom. The rise in labour force participation, particularly by women, and the demographic boom were closely related. At the same time, the rise in immigration changed the structure of the Spanish labour force but with little apparent impact on politics, where immigration remained distinctly under-politicized.  The combination of the labor reform and the forced pace of social cuts is changing these dynamics, in particular in those regions that are facing the highest external pressure and where anti-immigrant parties have begun to gain a footing over the last two years.