Highest recorded rise in unemployment in 2011

Unemployment in Portugal rose to 14% of the working population at the end of 2011, the biggest rise ever registered according to the country’s National Statistics Institute. Long-term unemployment reached 7.4%, and unemployment among people aged 15 to 24 reached 34.5%. Eurostat figures for January 2012 confirm this, recording Portugal’s unemployment rate at 14.8%. The government’s austerity policies are expected to increase unemployment further.

Record rise in unemployment

Portugal’s unemployment rate rose to 14% of the working population in the last three months of 2011, the biggest rise ever recorded by the National Statistics Institute’s (INE) Statistics Portugal data series. During that period around 81,000 people registered as unemployed, an increase in the overall unemployment rate of 12.9% with the number of unemployed rising to 771,000. A further 203,100 were registered as ‘inactive available’, and there were an estimated 186,600 ‘under-employed’. This brings the total of workers inactive in the labour market to more than 1,160,000, representing 20.3% of the working population. In early 2011 this rate was 17.7%.

The number of people in work has been dropping continuously since the second quarter of 2008, when it was 5,638,000. The figure is now 5;507,000, 131,000 fewer, as a result of the current crisis. The average unemployment rate last year was 12.7%, which represents 706,000 people out of work at any one time, higher than both the government predictions of 12.5% for 2012, and the European Commission’s autumn forecast of 12.6%. The government forecast for this year is 13.4% and the European Commission’s is 13.6%.

Long-term unemployment, defined as anyone out of work for more than a year, also rose sharply, increasing in three months from 6.4% to 7.4% or 407,500 of the working population. The unemployment rate for men has come close to that for women in the last quarter, reaching 13.9% for men and 14.1% for women.

Dramatic rise in youth unemployment

Young people aged 15–24 continue to be the group most severely affected by the lack of jobs, with 35.4% of them, about 156,000 people, unemployed between October and December, compared with 30% in the third quarter and 27% in the second; in other words, a 30% rise in youth unemployment between the second and fourth quarters. The compound annual growth rate in unemployment in this group was 30.1%. During the fourth quarter of 2011, youth unemployment stood at 35.4%, more than twice the national average of 14%.

A further 60,600 aged between 25–34 were unemployed in the fourth quarter of 2012. In this age group, the rate of unemployment is also above average at 15.8% of the working population.

Unemployment increase among graduates

The rate of unemployment among graduates was 10.6%, about 108,000 people. This is the first time that the recorded number of unemployed graduates has exceeded 100,000 in Portugal, almost double the number unemployed two years ago when 55,000 were without work in the fourth quarter of 2009. From the third to the fourth quarter of 2011 alone, the number of unemployed graduates increased by more than 13,000.

Despite this, the figures show that having a higher education continues to be an advantage in the labour market. The INE records that unemployment rose in the fourth quarter for all education levels. In the last quarter of 2011 it was 14.5% (about 484,000 people) for those with a basic education (up to end of primary) and even higher among those who had completed secondary or post-secondary education, at 15.4% or 179,000 people.

Social partners’ reactions

Recent data released by Eurostat suggest that unemployment in Portugal was even higher in January 2012. One in three young people were unemployed, 35.1% of the group, and the overall unemployment rate was 14.8%. With 815,000 people out of work, Portugal shares the third highest unemployment rate in the European Union with Ireland. Second highest is Greece with 19.9% unemployment and Spain with 23.3%.

The government sees no possibility of improvement in the near future. The Finance Minister, Vitor Gaspar, has said that Portugal’s gross domestic product is expected to drop by 3.3% this year. This is a downward revision on the government forecast in the proposed State budget for 2012 which predicted the economy would contract by 2.8%. Mr Gaspar has admitted that unemployment would continue to grow in 2012 and 2013, with an average rate of 14.5% expected this year.

Social partners have expressed their concern over rising Eurostat unemployment figures.

According to the General Secretary of the General Confederation of Portuguese Workers ( CGTP), Arménio Carlos, the Eurostat figures for unemployment show that the Government’s policy is ‘a disaster’ and will increase the number of poor people. Pointing out that 58% of the unemployed do not qualify for any unemployment benefit or social protection, he said that this figure could only rise given current forecasts, resulting in a ‘significant increase in the number of people entering poverty and exclusion’. Mr Carlos demanded ‘a necessary and urgent change of policy to promote economic growth and boost employment of quality’.

The General Secretary of the General Workers’ Union (UGT), João Proença, said that ‘unemployment should be the primary concern at national level’ and that the unemployment situation may lead to ‘a serious social crisis’. He commented:

We have to react, which for us means economic growth and employment policies, and also improvements in collective bargaining. If we do not put the fight against unemployment at the forefront of concerns, [there may be] a serious social crisis.

Maria da Paz Campos Lima, Dinâmia