Portugal to raise minimum wage to $700, still lowest in western Europe

Incumbent Portuguese Prime Minister and leader of the Socialist Party Antonio Costa. (AFP)
Updated 13 November 2019

Portugal to raise minimum wage to $700, still lowest in western Europe

LISBON: Portugal’s minority Socialist government presented on Wednesday a proposal to raise the monthly minimum wage by nearly 6 percent to 635 euros ($700) next year, remaining the lowest in western Europe.

Prime Minister Antonio Costa promised to raise the monthly minimum wage by 25 percent to €750 by 2023 when he began his second term in office last month.

“This trajectory contributes to the recovery of income and the improvement of social cohesion levels,” the government said in the plan, seen by Reuters. “The increase has coincided with significant dynamism in the economy and the labor market.”

One in five workers in Portugal are on the minimum wage and the employment status of 890,000 people was last year officially described as precarious, a term used to refer to nonstandard forms of employment, including temporary work and fixed-term contracts.

Costa’s center-left Socialists, who presided over four years of strong economic growth and budget deficit cuts, won an Oct. 6 election, expanding their parliamentary representation as the biggest party but still just shy of a majority.

Now governing alone, Costa relied on support from two far-left parties — the Communists and Left Bloc — in the last four years and the wage plan is likely to be well received by them.

Job insecurity 

Handed over to workers’ unions and others during a meeting on Wednesday, the government’s proposal said the new minimum wage of €635 will be implemented on Jan. 1, 2020.

Increases will be negotiated and reviewed every year until it reaches the €750 target in 2023.

Between 2015, when the Socialists took power, and 2019, the minimum wage increased 14 percent, from €505 to €600, way below neighboring Spain’s €1,050.

“But the salary increases have not yet reached the pace of growth needed to ensure a balanced distribution of income,” the government said, adding Portugal “remains one of the countries with the highest income inequality rates in the European Union.”

Analysts see job insecurity as a big flaw of the economy, which is cooling after recording its strongest expansion in almost two decades in 2017 as Portugal recovered from a debt crisis that required an international bailout.

Portugal’s biggest workers’ union CTGP said the increase to €635 is “insufficient,” arguing the country is now “in a position to go much further.”


Oil falls below $57 on virus impact and OPEC+ delay

Updated 19 February 2020

Oil falls below $57 on virus impact and OPEC+ delay

  • Contagion ‘is spooking market players,’ analysts say after Asian shares fall and Apple issues warning

LONDON: Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on crude demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.

Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus. Though new cases in mainland China have dipped, global experts say it is too early to judge if the outbreak is being contained.

Brent crude was down 82 cents at $56.85 a barrel in mid-afternoon trade after rallying in the previous five sessions. US West Texas Intermediate crude fell 70 cents to $51.35.

“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.

“OPEC+ has shown no sign yet of reacting to the virus-related slump in demand by making additional production cuts.”

The virus is having a wider impact on companies and financial markets. Asian shares fell and Wall Street was poised to retreat on Tuesday after Apple said it would miss quarterly revenue guidance owing to weakened demand in China.

“This has spooked market players and triggered a sharp pullback in risk assets,” said Tamas Varga of oil broker PVM.

The IEA last week said that first-quarter oil demand is likely to fall by 435,000 barrels per day (bpd) from the same period last year in the first quarterly decline since the financial crisis in 2009.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have been considering further production cuts to tighten supply and support prices.

The group, known as OPEC+, has a pact to cut oil output by 1.7 million bpd until the end of March.

The next OPEC+ meeting next month is set to consider an advisory panel’s recommendation to cut supply by a further 600,000 bpd. Talks on holding an earlier meeting in February appear to have made no progress, OPEC sources said.

As well as OPEC+ voluntary curbs, support for prices has come from involuntary losses in Libya, where output has collapsed since Jan. 18 because of a blockade of ports and oilfields.