L’ on the state of the Catalan economy has the quality one would expect from the group of economists who have produced it. It conveys a strong message, albeit full of nuances. The aspect that interested me most is the conclusion (in Annex 5) that Catalonia has a segment of its economy – including industry – which, in terms of productivity, is comparable, for example, to the corresponding segment in the Basque Country. It reaffirms me in the conviction that we still have a solid foundation on which, if we set our minds to it and Europe helps, we can build a first-class economy. I also believe that this requires the spearhead of our development policies to pivot on the impetus of the most advanced and productive sectors.The report observes that we also have a segment of the economy with low productivity that has induced, and absorbed, in a short time, exceptional demographic growth. As a consequence, the averages for productivity (of labor, per hour worked) and income per person have widened the gap compared to the European average. I note that this does not necessarily mean impoverishment, neither for the native population nor, obviously, for immigrants. I also agree that a country's income per person is more important than absolute income, but, even so, size matters. At least in Catalonia, it dilutes the weight of debt and increases political weight.
In itself, the statistical fact says nothing about the growth capacity of the high productivity segment. The key question is whether the low productivity sector interferes with the growth of the high productivity one, whether tourism in Lloret or the meat industry in Osona seriously limit Barcelona's innovative ecosystem or Tarragona's petrochemical complex. The Fènix Report thinks so, and it must be admitted that demographic growth has not been coordinated with a proportionate expansion of social services, and that there are serious tensions (housing, commuter rail...) that interfere. In principle, this situation should be temporary and I would say that the report acknowledges that with orderly policies, population increases could be better absorbed. But it considers that, for non-temporary reasons, the low productivity segment is a structural burden on the Catalan economy. So much so that it is difficult not to conclude from the report's emphasis that its reduction must be the spearhead of development policy. I am very much in favor of policies that increase its productivity (the tourist tax was introduced by a government of which I was part), but I think we should not distract ourselves from the primary objective and where we are truly playing for the future: strengthening and expanding the high productivity segment.
The report's fatalism stems from a fiscal approach. It is argued that the low productivity segment creates jobs occupied by immigrants with wages below the threshold at which the tax revenues they generate, added to social security contributions, offset induced social expenses. And that, therefore, it receives, perhaps unfairly, a hidden subsidy. I believe this methodology has weaknesses:
1. Beyond tax revenues, companies generate benefits for consumers of their products – and also positive or negative external effects –. The report acknowledges this regarding care and agriculture (positive impact on people and territory) and does not challenge them. I venture to point out that tourism provides us with air connectivity. Do we save that too?
2. In the fiscal criterion, I am missing a component. Investment that generates new social spending also generates tax revenues from business profits. The report focuses heavily on the worker, but the relevant decisions are made by companies.
3. Catalan Treasury is part of a quasi-federal treasury in which social expenses are highly mutualized. When an immigrant joins the Catalan workforce, the induced social expense –beyond the initial shock– is not covered solely by the Catalan taxpayer. In large part, it is covered by taxpayers from the rest of Spain (we do the same for their immigrants). A paradoxical implication would be that if we were to reduce our low-skilled immigration, the Catalan fiscal deficit with respect to the rest of Spain could increase.
To conclude: I share the concern for the health of the Catalan language in the face of demographic shock. However, with our low birth rates, it is certain that we need immigrants and they will come. Therefore, the degree of Catalanity in the Catalonia of the future depends on knowing how to incorporate them –a term from Cardús– into our society.
