Unemployment at highest level in three decades

According to the National Institute of Statistics, in 2009 unemployment reached the highest level in Portugal in the last three decades, rising to 9.5%. Moreover, the General Confederation of Portuguese Workers (CGTP) argues that the rate is even higher if taking into account economically inactive persons and those in ‘visible underemployment’. CGTP is also concerned that the rise has not been followed by an increase in unemployment benefits coverage.

Latest unemployment trends

Data from the National Institute of Statistics (Instituto Nacional de Estatística, INE) indicate that, in 2009, the number of unemployed people reached the highest level of the last three decades, at 528,600 persons. This corresponds to a rise in the unemployment rate up to 9.5% in 2009 (Table 1). The unemployed population increased by 23% between 2008 and 2009.

Unemployment data from INE are provided through the quarterly Employment Survey (Inquérito ao Emprego), where ‘unemployed’ persons are classified as individuals with a minimum age of 15 years, who, in the week prior to the interview, did not have a job, were available for work and had looked for a job over the last 30 days.

Table 1: Unemployment rate, by age group, 2002–2009 (%)

Age group

2002

2003

2004

2005

2006

2007

2008

2009

15–24 years

11.6

14.5

15.3

16.1

16.3

16.6

16.4

20.0

25–34 years

5.6

7.5

7.2

8.9

9.1

9.8

8.7

10.9

35–44 years

4.0

5.1

5.5

6.5

6.3

6.7

6.7

8.5

45+ years

3.0

3.6

4.5

5.2

5.4

5.6

5.4

7.0

15–64 years

5.3

6.7

7.0

8.1

8.1

8.5

8.1

10.0

Total

5.0

6.3

6.7

7.6

7.7

8.0

7.6

9.5

Source: INE, February 2010

‘Real’ unemployment significantly higher

The picture is considerably more critical if one evaluates the rise in and social impact of unemployment when taking into account persons available for work in the period of reference – that is, economically inactive persons who are available for work and those who fall into the category of ‘visible underemployment’. In 2009, about 71,900 persons were included in the group of economically inactive people available for work (Table 2), comprising individuals who were neither considered employed nor unemployed during the short reference period used to measure the current activity, but who were available for work. Moreover, about 64,600 persons were included in the category of visible underemployment, consisting of those who are involuntarily working for less than the normal duration of work determined for the activity, and who are seeking or available for additional work during the reference period.

Table 2: Main unemployment trends, 2008–2009
 

2008

2009

Variation 2008/2009 (%)

Active population (1)

5,624,900

5,582,700

-0.75%

Unemployed population (2)

427,100

528,600

23.76%

Economically inactive population available for work (3)

 69,400

 71,900

3.60%

Visible underemployment (4)

 69,300

 64,600

-6.78%

Total (4 = 2 + 3 + 4)

565,800

665,100

17.55%

Official unemployment rate (2/1)

7.59%

9.47%

 

Unemployment rate in wider sense (4/(1 + 3))

9.94%

11.76%

 

Source: INE, 2010

Trade union estimates

The General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses, CGTP) estimates that the average number of unemployed persons in 2009 – including economically inactive persons who are available for work and those who fall into the category of ‘visible underemployment’ – amounted to nearly 665,000 workers and that the unemployment rate in the broader sense totalled 11.7%. Furthermore, CGTP highlights that the figures released by INE were even more critical in the last quarter of 2009, insofar as around 563,000 persons were officially unemployed, about 73,000 were economically inactive and available for work, and approximately 67,000 individuals were in the category of visible underemployment. Altogether, this amounted to a total of 704,000 persons who were actually unemployed, representing an unemployment rate of about 12.4%.

Sectoral job losses

In terms of the evolution of employment according to sector of economic activity, it was observed that more than 100,000 jobs had been cut in the secondary sector of construction and manufacturing during 2009, with nearly 50,000 jobs lost in manufacturing. In the services sector, about 50,000 jobs have been lost.

The analysis of the increase in unemployment by sector of economic activity shows that the services sector has the highest number of unemployed people, at 57.7% of the total number of unemployed persons registered at the country’s employment centres. This corresponds to more than 65,000 unemployed unskilled workers in services and trade (18.9% in January 2009) and over 63,000 unemployed persons from the personal protection services and security industry (24.3% in January 2009). The secondary sector represented 38% of the total number of unemployed people registered at Portugal’s employment centres, constituting over 50,000 unemployed unskilled workers from the ‘mining, construction and manufacturing’ industries (22.2% in January 2009) . The primary sector of agriculture, fishing and forestry, and mining and quarrying represented 3.8% of the total unemployed population, constituting an increase of 22.3% in 2009.

Another relevant fact is the growing insecurity of employment relations, translated into the decrease of 112,000 open-ended permanent employment contracts in 2009. Furthermore, the proportion of newly registered unemployed persons whose short-term or temporary employment contract had ended represented about 36% of the total number registered as unemployed at the employment centres in January 2009.

Concern over unemployment insurance coverage

CGTP has also expressed concerns over social security coverage for unemployed people. According to the trade union confederation’s own calculations, based on social security data, the number of unemployed people without any social security support increased in 2009. During 2009, more than half of unemployed workers (50.7%) did not receive any unemployment-related social benefits, such as unemployment benefit or unemployment social allowance; only 33.7% received unemployment benefit (Table 3).

Table 3: Number and percentage of persons receiving unemployment compensation, 2009
 

Number of persons

% of persons

Unemployed persons receiving unemployment social allowance benefit + unemployment benefit

327,400

49.23%

Unemployed persons receiving unemployment benefit

224,200

33.71%

Source: CGTP, based on social security data processed by CGTP, 2009

The issue of social protection for unemployed people has been attracting the attention of Portugal’s public authorities and social partners. On 14 January 2010, the government announced a new package of measures for combating unemployment (PT1001059I). However, neither the previous measures taken in 2009 nor those announced in January are deemed sufficient to tackle the economic crisis, according to the proposals presented by CGTP and the General Workers’ Union (União Geral de Trabalhadores, UGT) a year ago (PT0906049I). Moreover, the level of increase in the number of unemployed persons seems to be much higher than the rise in the number of persons receiving unemployment compensation. Nevertheless, the Ministry of Labour and Social Solidarity (Ministério do Trabalho e da Solidariedade Social, MTSS) attributes this trend not only to the entry of young people into the labour market, but also to the fact that some unemployed people have reached the end of the concession period for receipt of both unemployment benefit and unemployment social allowance.

Unemployment continues to rise

On the other hand, unemployment is still rising, as confirmed by the Institute for Employment and Vocational Training (Instituto de Emprego e Formação Profissional, IEFP), which indicated that the number of unemployed people registered at Portugal’s employment centres rose by 19.6% in February 2010 compared with February 2009. Furthermore, the Eurostat update from 1 March 2010 estimated that the unemployment rate in Portugal stood at 10.5% in January 2010, which was two percentage points more than that in January 2009, while the unemployment rate in the eurozone remained relatively stable, increasing to about 9.9% during the same period. Consequently, the unemployment rate in Portugal is now above both the European Union average (9.5%) and the eurozone average (9.9%).

Maria da Paz Campos Lima, Dinâmia

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