Portugal: Rise in number of workers on minimum wage

Rising numbers of workers are on the minimum wage in Portugal. Estimates at the end of 2014 put the share at around 13% of the working population.

The amount of the minimum wage, frozen for three years during Troika intervention, was increased in the last quarter of 2014 (in Portuguese, 153 KB PDF) from €485 to €505. This followed a tripartite agreement (in Portuguese, 484 KB PDF) in September 2014, between the government and the social partners. However, the General Confederation of Portuguese Workers (CGTP) refused to sign, arguing that not only was the increase very limited, but that it was wrong to reduce employers’ social security contributions on the minimum wage by 0.75%.

The Statistical Bulletin for January 2015  shows that 12.9% of full time employees are on the minimum wage (in Portuguese, 416 KB PDF).  This amounts to about 465,000 workers, which is 1.2 percentage points higher than in April 2013. The bulletin, issued by the Office for Strategy and Studies (GEE), says most of these workers were women (17.5%, 2.4 percentage points higher than in April 2013) compared with 9.4% of men (0.2 percentage points more than in April 2013). 

According to a report on Portugal by the European Commission, only 5% of its workers were paid the minimum wage in 2005 (708 KB PDF). However, the share varies widely between sectors. A high concentration of workers (21%) are paid the minimum wage in certain sectors such as the accommodation and food service activities sector, and in the other service activities sectors. The country report also said that ‘the expected immediate effects of the latest increase [in the minimum wage] on employment and competitiveness are relatively small’.

 

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