Let’s say goodbye in Spain to the welfare state

Let me suggest that you change the movie. Turn off that projection because reality, always more stubborn and boring than fiction, is telling us another story. A much quieter one, but infinitely more lethal.

It’s not an explosion: it’s an implosion.

In November 2022, the planet reached the milestone of 8 billion inhabitants. The headlines were filled with exclamations and round figures. But if one bothered to read the fine print of the UN report, reality sounds like the screeching of brakes pressed to the floor.

It is true that it took humanity an eternity, literally its entire history until 1800, to add its first 1 billion. Then we skyrocketed, drunk on penicillin and the industrial revolution, and projected to reach 9.7 billion in 2050.

But lo and behold, the engine has seized. The global fertility rate, which in the 1950s was 5 children per woman, has plummeted to 2.2 in 2024. We are touching the bar of 2.1, the minimum necessary for one generation to replace the previous one.

The translation is simple: we are running out.

And if the world slows down, Europe has directly gone into reverse and thrown the keys out the window. Our continent lives up to its adjective “old” with suicidal fidelity: we are the nursing home of the planet.

The median age in Europe is around 44 years, the highest in the world. According to Eurostat, those over 65 years of age (21.3%) already vastly outnumber young people under 14 (barely 19.7%). We have inverted the population pyramid until it became a perfect geometric sarcophagus.

“The welfare state is based on a pyramid scheme that requires new payers at the bottom to support those at the top”

And this, dear readers, is not just a matter of seeing more gray hair on the street or that playgrounds have become pipicanes.

It is the irremediable demolition of the welfare state. That European invention that we boast so much about, that safety net that allowed us to live with the certainty that the State would provide, It is based on a pyramid scheme that requires new payers at the bottom to support those at the top.

The dependency index (that cold ratio that tells us how many grandparents depend on each worker) was 33% in 2022. That is, for every 100 guys getting up early to get the country up and running, there are 33 retirees getting paid. The UN warns us that in developed economies we will go from 28 dependents per 100 workers (2020 data) to 50 in 2050. A two to one.

The accounts simply don’t add up.

The working-age population in the OECD has stopped growing. It’s over. In Spain, if we do nothing (and let me doubt that we will do anything sensible), the workforce will contract by up to 30% by 2060, according to the INE.

The result? A collapse in GDP per capita of 40%. We will be poorer, older and lonelier.

And in this Dantesque scenario, Spain, as is our custom, has decided to be a leader. Leader in the disaster, of course.

Our country is the perfect laboratory for demographic suicide. In 2023 we set a historic low with only 322,075 births. It is the lowest figure since records began. which has its merit considering that we have gone through wars and epidemics. The Global Fertility Rate is dragging down at 1.19 children per woman.

The Spanish family structure has mutated dizzyingly and critically. We have gone from the horizontal model (many brothers, many cousins) to a vertical one. Today, 90% of Spanish children have living grandparents and even great-grandparents, living together for up to four generations, but the base is increasingly scarce. We have more ancestors than descendants.

We are a tree with many roots and no new branches.

The labor market is the reflection of this sclerosis. At the end of 2023, almost half of the available workforce in Spain (48%) was over 45 years old. We are a country of senior workers.

And, paradoxically, we have 560,000 unemployed people over the age of 50, a shameful record, while we maintain a youth unemployment rate of 27-28%, almost double the European average.

It is the perfect absurdity. We despise the experience of the elderly by expelling them from the market prematurely, while we are unable to integrate young people who we have defrauded with the promise that a university degree was a passport to successwhen the market demands soft skills and critical thinking that the university does not teach.

And then there is the elephant in the room that no one wants to talk about during the election campaign: pensions.

Spain has the highest replacement rate in the eurozone.

A Spanish retiree earns, on average, 77.5% of their last salary, compared to the 44.5% average in the OECD. It is a very generous system, yes, but financed with Monopoly money.

The system’s deficit is structural and rampant. We need to inject more than 38 billion extra euros annually (almost 3.8% of GDP) via State transfers to keep the wheel turning.

With a projected increase of 50% in the number of pensioners between now and 2050 (we will reach 15.6 million), the system is not at risk. It’s technically broken.

If you want to see the future, don’t look into a crystal ball, look at South Korea. There, the dystopia has already arrived. With a fertility rate of 0.72 children per woman (absolute world record), the country is fading.

The screenings by the Seoul government and the UN are like horror movies. The 52 million South Koreans could remain at 7.5 million in a century.

An ancient nation disappearing down the drain of history in a couple of generations.

To this, the automatic response is usually “immigration will save us.” It is the wild card that the left (and part of the economic right) draws to avoid facing the underlying problem.

But of the five continents, there is only one demographic engine left burning, Africa, which will double its population by 2050, and one in four people will be born there, with fertility rates that are still around four children per woman.

But trusting everything to imported labor is terrifyingly simplistic. First, because the population is already falling in ten EU countries despite migratory flows.

And second, because immigrants are not immutable reproductive machines. They are people who adapt. Studies show that the fertility of immigrant women quickly converges with that of native women. To the second generation, the problem persists.

You cannot cover an arterial hemorrhage with plasters, no matter how many you bring from outside.

The thesis defended by this article is not optimistic, but it aims to be honest. The demographic crisis is already inevitable. We are going to take the hit. The inertia of the data is like that of an ocean liner, it does not turn in a hundred meters.

However, just because a crash is inevitable does not mean that we should let go of the steering wheel and close our eyes.

We have to assume that the concept of retirement as we know it is dead. We will have to work for more years, whether we like it or not. But to do that, we have to stop treating a 55-year-old professional like a useless piece of junk.

We have to boost productivity, embrace technology and AI not as enemies, but as the only lifesavers that will allow us to maintain our standard of living with fewer hands working.

And, above all, we have to stop being frivolous. Let go of cosmetic conciliation policies that do not reconcile anything and absurd cultural wars. Having children in the West has become an act of financial and logistical heroism.

As long as we continue penalizing motherhood and turning the family into a luxurywe will continue digging our own grave.

The demographic winter is not coming, it is already here. And it’s freezing cold.

The question is not how to avoid it, but whether we will be able to keep warm enough so that civilization, as we know it, does not die of hypothermia.

*** Andrés Ortiz Moyano is a journalist and writer.