Spanish workers now make up 29% of the workforce in Gibraltar after their numbers increased by over a thousand in the last four years. Their presence is increasingly significant among the total foreign workforce on the Rock, which remains reliant on the labor force that crosses the border daily. Conversely, the number of foreign cross-border workers has decreased during the same period.
These are some of the conclusions drawn from the speech delivered by the Minister for Economic Development, Enterprise, Telecommunications, and Savings Bank of Gibraltar, Joe Bossano, during the parliamentary budget debate last Thursday.
According to Bossano, based on data from the open contracts register with the Employment Service, the number of cross-border workers did not increase in April compared to the previous month, with a total of 15,388 individuals. However, the number of Spanish workers within this total did increase by 7, from 10,344 to 10,351. "This is a continuation of the trend reflected in the nationality of cross-border labor since the 2019/20 fiscal year when the last general elections were held," explained the minister.
In March 2019, the cross-border workforce numbered 14,894 individuals, and by the end of 2023 (as of March), it had increased to 15,388, representing a rise of 484 over the four-year period. However, during that same time, the number of Spanish cross-border workers increased from 9,296 to 10,340, an increase of 1,048. "This means that the proportion of cross-border workers of Spanish nationality has increased at the expense of other nationalities, primarily from the European Union, with the largest decrease observed among British workers, whose numbers decreased from 2,378 to 1,984, a decline of 394," Bossano continued.
When comparing March 2023 with March 2020, when the coronavirus pandemic began, the figures show an increase of 181 employers (from 4,472 to 4,653) and 840 employees (from 34,876 to 35,716). "After 2019, the new economic model, in terms of our policy, can no longer be the increasing reliance on cross-border workers because the certainty of access (to the labor market) that existed when we were part of the European Union disappeared with Brexit and will not return," Bossano said.
From 2014 to 2018, the workforce experienced an increase of 5,573 individuals. The majority were cross-border workers, accounting for 82.3%. However, in the following four years (until October 2022), the increase was 1,155, and the trend slowed down, with residents now forming the majority (57.1%). "This is in line with our sustainability policy and the increase in per capita income. This is what we set out to do in the 2019 program: limit our dependence and increase our self-sufficiency to provide resilience to our economy," Bossano stated.
To understand the change, it is necessary to analyze the data from two periods. Between 2014 and 2018, there was an increase in the number of employers by 263 (from 1,624 to 1,887), and the workforce grew by 5,573 individuals (from 24,422 to 29,995). The participation of cross-border workers in the labor market increased from 9,070 to 13,654, an additional 4,584 positions. Therefore, out of the total increase, only 989 were resident workers. In other words, 82.3% of the increase were cross-border workers, and 17.7% were Gibraltarians.
However, from 2018 to 2022, there was an increase of 155 employers (from 1,887 to 2,042), and the workforce grew by 1,155 individuals (from 29,995 to 31,150). During the same period, the participation of cross-border workers in the labor market increased from 13,654 to 14,150, a rise of 496. Therefore, out of the increase of 1,155 individuals, 496 were cross-border workers, and 659 were residents. In other words, 42.9% of the new workers were cross-border, and 57.1% were residents.
"While it is likely that the employment service records may overstate the size of the workforce at any given time due to delays and, in some cases, employers failing to register layoffs, they are nevertheless a useful indicator of whether the workforce is growing or shrinking," the minister clarified.
Within the European Union, the only country with a similar percentage of cross-border workers is Luxembourg, whose per capita GDP is $127,580, the highest in the world. According to Luxembourg's National Institute of Statistics and Economic Studies (STATEC), 44.9% of its workforce consists of cross-border workers. The majority are individuals from France, followed by Germany and Belgium, who, as EU citizens, can travel freely without restrictions. This has been the case in Gibraltar as well, although it remains uncertain whether this may change based on the negotiation determining the Rock's access to Schengen.
Regarding Social Security contributions, Bossano stated that the government's policy is to introduce changes that would allow both men and women to receive a legal pension from the age of 60. However, this will only be possible if funding is secured through increased contributions, which will depend on the negotiation's outcome.