Table of Contents


Contact Information

Immigration, Social Dialogue and Economic Growth in the Old Periphery of Europe: The Celtic and Latin Tigers?

By Oscar Molina


Notwithstanding the success of these pacts in achieving the goals of political and economic stability, culminating in the accession of Spain to the European Economic Community, the last tripartite agreement was signed in 1985. The reasons for the collapse of this period of centralised wage bargaining and social pacts in Spain are manifold. On the one hand, a large section within the union movement, comprising the CCOO (Workers’ Commissions), was very critical of the social pacts as they required that trade unions could not fully exploit their bargaining power in order to obtain wage increases. Moreover, the CCOO criticised the neo-liberal economic policy of the government, including the 1984 labour market reform and the fact that workers were being burdened with most of the costs of adjustment. Following some years of conflict between trade unions and the government, social dialogue was restored in the mid 1990s, initially with the employer organisations alone, then also with the government. As a consequence of this move from conflict towards cooperation, several agreements were signed. Some of these agreements were bipartite, that is, between unions and employers - like the agreements on out-of-court dispute resolution, learning and training. Other agreements were tripartite, that is, including the government, trade unions and employer associations. The most significant tripartite agreements during these years were the 1996 pact on the reform of the social security system and the 1997 labour market reform. Finally, since 2001, trade unions and employers have been signing centralised agreements containing guidelines for collective bargaining.

Social pacts, or social partnership agreements as they are known in Ireland, between trade unions, employer associations, third sector organisations and the government, have become the flagship of the Irish Celtic Tiger phenomenon. The story of centralised wage agreements started in Ireland in the 1970s. However, due to the difficulties in implementing the terms of the agreements at company level, the centralised agreements were abandoned and there followed a period of de-centralised wage bargaining. Nonetheless, a new centralised partnership agreement was again signed in 1987. The objective of this agreement was to help the Irish economy to move away from the path of low growth, high inflation and high unemployment that it had been on since the early 1980s. The success of this partnership agreement in achieving the objectives of wage moderation and macroeconomic stability led social partners and the government to renew the agreement in 1991. So far, six partnership agreements have been signed (see table 1), demonstrating a strong resilience compared to other European countries’ experiences. Another key feature of these agreements is the importance of the wage component. Even though a trend can be appreciated in the widening of the number of issues dealt with in these agreements, pay remains the glue holding the partnership agreements together. Finally, some authors have also highlighted a trend towards the institutionalisation of these agreements, as shown by the almost automatic renewal of agreements every four years, notwithstanding that some conflicts have emerged in the re-negotiation phases of the last three partnership deals.

2. From outward to inward migration

Another key feature of the recent histories of Ireland and Spain has been the role of migration. For most of the twentieth century, these two countries were subject to large outward migration in search of better economic conditions. In the case of Spain, migration had both a domestic and international component. Domestically, there was migration from the southern regions of Andalusia, Extremadura and Castille towards the north. At the same time, there was significant economic migration towards other European countries like France, Germany and Switzerland. In the case of Ireland, migration occurred mostly towards the United Kingdom, the United States and Canada.

This historical pattern has changed dramatically during the last fifteen years, as these two countries have witnessed a spectacular increase in inward migration, transforming themselves into key destination countries in a European context. Statistics show that Ireland and Spain are two of the EU countries where the immigrant proportion of the population has increased to the largest extent. As economic conditions significantly improved in the recent period, the two countries have become attractive destinations. This trend has been further reinforced by the recent eastern enlargement of the EU, resulting in the large Polish and Romanian communities established in Ireland and Spain respectively.

Most of the migrant population in Spain are employed in low-skilled jobs and sectors like construction, agriculture, cleaning and catering. These are low-paid jobs that remain unfilled by the native population. Moreover, it is estimated that a considerable proportion of this migrant population has undertaken some form of activity in the underground economy due to the high level of regulation of economic activity in Spain. The stock of migrant workers available to Spanish employers has guaranteed them a high level of flexibility whilst keeping wage pressures low due to the available pool of people. However, this has come at the cost of low productivity increases and low incentives for companies to innovate due to the availability of cheap labour, thus jeopardising the future growth of the economy.

Inward migration in Ireland has come mostly from Eastern Europe and migrants are employed largely in the service sector due to the boost in demand triggered by the increase in income levels. More recently, a trend has also been observed pointing towards the inward migration of more skilled employees to work in the public sector, or to occupy middle-rank managerial positions in private companies. As Ireland remains the EU country with the lowest unemployment rate and showing evident signs of skill shortages, this trend is very likely to become even more prominent in the next few years.


1 - 2 - 3 - 4


Copyright © Society for Irish Latin American Studies, 2007

Online published: 29 August 2007
Edited: 07 May 2009

Molina, Oscar, 'Immigration, Social Dialogue and Economic Growth in the Old Periphery of Europe: The Celtic and Latin Tigers?
' in Irish Migration Studies in Latin America, 5:2 (July 2007), pp. 112-116. (www.irlandeses.org), accessed .


The Society for Irish Latin American Studies

 Copyright Information