From the uncertainties to a diversified service economy: the case of industrial relations and socio-economics of Spain

The Spanish case encapsulates the evolution from the uncertainties of industrial and agricultural restructuring to a diversified service economy, but with persistent challenges in terms of social inequalities and employment quality. Indeed, while the Spanish economy is among the fastest growing in the EU, access to housing and the loss of purchasing power have remained structural problems since at least 2008. The industrial relations system in Spain has generally been classified under the so-called state-centre model of industrial relations, with stronger dependence on state regulation. Collective bargaining coverage is relatively high, within centralised but quite uncoordinated collective bargaining institutions. High collective bargaining coverage manly relies on state regulation (mandatory extension mechanisms, etc.) and it coexists with comparatively weak trade unions, which record low densities. Social dialogue has played a key role in coordinating collective bargaining, regulating the labour market and governing socio-economic policy-making. However, Its importance and intensity has evolved in accordance with the economic and political context.

The automotive sector has been a pillar of Spanish industry since the 1960s, consolidating its position as the second largest producer in Europe and ninth in the world, with a majority presence of European and foreign companies. It accounts for around 8% of GDP, although recovery to pre-2008 crisis production levels did not occur until 2016, hampered by the fact that it is a fundamentally export-oriented sector. The electrification of mobility in Spain represents an uncertain scenario for the sector, which is caught between announcements of heavy foreign investment and its slow penetration of the domestic market.

For its part, the on-demand passenger transport sector has undergone a profound transformation since 2014 with the arrival of digital platforms such as Uber and Cabify. The 2009 Omnibus Law partially liberalised the sector by removing restrictions on VTC licences. This led to intense conflict with traditional taxis, culminating in mass protests between 2017 and 2019. Later, a 2018 state decree established the ‘1/30’ rule (one VTC licence for every 30 taxi licences), although the situation varies, as much of the authority lies with the regions and municipalities. These transformations – as well as the trend towards electrification and digitalisation – are a source of tension between the traditional taxi model, based mainly on self-employed workers with municipal licences, and the platform model, but also of uncertainty about the employment model within the platforms.

Employment in the care sector has been growing in economic and social importance for the last twenty years, mainly due to the ageing of the population. In addition, since the 2006 Dependency Law, there has been a trend towards greater formalisation, both in terms of the recognition of rights and in labour relations, although these continue to be marked by economic and legal precariousness. Despite the challenges in terms of funding and training, the current trend is towards a community care model (State Strategy for a New Community-Based Care Model, 2024–2030), as opposed to institutionalisation.

Entry into the EU led to the gradual liberalisation of the electricity and hydrocarbon markets, privatising state-owned companies such as ENDESA and creating independent regulators. The sector is currently undergoing a profound transformation towards decarbonisation, consolidating renewables as the central axis but with persistent technological challenges in terms of storage and self-consumption. Although more than 50% of electricity comes from renewables, up to two-thirds of final energy (electricity, oil, etc.) is still imported and from non-renewable sources. Furthermore, regional inequalities and improving working conditions in the sector are significant challenges.

The report on the Spanish case is rounded off with an overview of the installation of hyperscale data centres in the autonomous community of Aragon. There, Amazon Web Services is developing one of its Availability Zones. The project, which began in 2019 but will see a huge expansion in 2024, will involve an investment of around €18 billion, one of the largest investments in Europe within the sector. The investment is part of the acceleration of the sector and the digital transition, but also of the policies of local and regional administrations to attract investment. Its disruptive effect is twofold: on the one hand, it represents a significant boost to economic activity and the creation of basic infrastructure. On the other hand, however, concerns have been expressed about its environmental and energy impact, and the real scope of its job creation - and the conditions attached to it.