Phoenix or lame duck?
BarcelonaAfter decades dedicated to politics, the former Prime Minister of Luxembourg and then President of the European Commission, Jean-Claude Juncker, delivered the best quote of his life: "We all know what needs to be done, what we don't know is how to get re-elected once we have done it" (2007). The difference between knowing and doing, or between diagnosis and solution. And here we are, in the permanent struggle between what knowledge tells us, what the quality of public debate is capable of agreeing on, and what is politically executed. We are talking about democratic politics, of course, which has many more limitations than autocratic regimes, which, in the same way they approve a five-year plan, make a minister disappear or make a dissident fly out of a window.
In Catalonia and Spain, we diagnose ourselves economically in a cyclical manner, and this time in detail, the Fenix Report (www.informefenix.cat), which deserves a calm debate. It defends a central thesis perfectly acceptable about productivity: Catalonia has grown a lot in total GDP, but very little in real prosperity per inhabitant. Economic growth in the last two decades has been based mainly on increasing population and employment, but not on improving productivity.
The diagnosis is severe: Catalonia has gone from converging with Europe for a large part of the 20th century to diverging from it since 2000, and now the differential has widened from -8% to -13%.
Immigration: insufficient demographic dividend
The report presents immigration as a phenomenon with two opposing effects. On the one hand, it has brought a positive demographic dividend: it has offset the aging of the population and increased the proportion of people of working age.
But, on the other hand, according to the report, this positive effect has been overcome by a negative effect: a large part of immigration has been absorbed by sectors of low productivity and low wages, which has reduced the average productivity of the economy.
The thesis is forceful: immigration is not necessarily negative for per capita GDP growth, but it is when it fuels a model based on low-skilled jobs, low wages, and low value-added sectors.
Another important point of the report is that the problem is outside of industry, especially in some services and in certain agri-food activities. The report identifies a dual structure in job creation. On the one hand, high-productivity sectors have grown, such as the chemical industry, the pharmaceutical industry, information, and scientific and technical services. But, on the other hand, many low-productivity and low-wage sectors have also grown, such as hospitality and the meat industry.
The most controversial idea
One of the central and debatable concepts of the report is that of highly subsidized wages. The authors argue that, below a certain salary, the worker and the company do not contribute enough taxes and contributions to cover the basic public services that this worker and their family receive throughout their lives: healthcare, education, social services, security, and justice.
The report places this threshold at around 29,000 gross euros per year in 2025. Not because they necessarily receive direct subsidies, but because society as a whole indirectly finances part of the social cost associated with these low wages. Obviously, this is social democracy and the welfare state, but the report warns about its sustainability.
The report projects the current model until 2050. If Catalonia were to continue with the same demographic growth pattern of 1% per year and weak productivity, it could reach 10.5 million inhabitants. The authors admit that this is materially possible, but at a high cost in terms of housing, water, energy, public services, social cohesion, and language problems.
The text is much more than an economic report: it is an indictment of the Catalan growth model of the last twenty-five years. Its message is that Catalonia has confused growth with prosperity and employment with progress. The most debatable part is how the report links immigration, low wages, productivity, and the sustainability of the welfare state. Its most interesting contribution is that it forces us to look beyond aggregate GDP and ask ourselves what kind of growth we want, with which sectors, with which wages, and with what real capacity to sustain the welfare state.
With or without the report, we know that Catalonia has industry, exports, research, talent, universities, healthcare, biomedicine, technology, and a global city like Barcelona. But it also has a structure that is too dependent on sectors intensive in cheap labor, a housing crisis that threatens social cohesion, and an insufficient capacity to convert knowledge into large and productive companies. The future will not be won solely by limiting tourism and regulating immigration; it will be won if the country manages to ensure that its best research, its best industry, and its best talent weigh much more in the overall economy. Welcome to the debate and long-term policy.