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.”

Frank Kane’s Davos diary: Davos high life? Here’s the lowdown

Updated 23 January 2020

Frank Kane’s Davos diary: Davos high life? Here’s the lowdown

I know everyone thinks Davos is all about lushing it up in the Alps with the global elite, but actually — if you take it seriously — it is very hard work. I don’t expect any sympathy.

If you are staying at Klosters, the fairy-tale town about 15 kilometers away from the main World Economic Forum (WEF) activities, you will have an early start to get to the first events of the day — usually a breakfast meeting in one of the Davos hotels at around 7.30 a.m.

That involves rising at about 6 a.m., in the pitch black and subzero temperatures, to wait for a shuttle bus to drive you the 30-minute trip to Davos. You might wait, half asleep and freezing, while several pass you by, full of other bleary-eyed delegates, but generally the shuttle gets you to the Congress Hall on time.

It can be a long schlepp through snowy streets and several levels of security to reach your venue, then back through the same security cordon to the Congress Hall for a plenary session or a bilateral meeting.

The same process — dress up warm, strip down for security, redress — can happen a dozen times a day, depending on where your meetings are. It is generally advisable to spend the day in the Congress Center to minimize this hassle. There is always a lot going on there, the hub of the annual meeting, but sometimes discussions have to be secluded outside, especially as Davos grows in popularity with the big global corporations that take over the town for the week.

By the time the afternoon comes along, the adrenaline rush of all that intellectual stimulation has begun to fade, and as the temperature starts to fall with the setting sun, fatigue builds up noticeably. Strong cups of coffee and a few Alpine energy bars become de rigueur, because you are only halfway through the day.

One regular Weffer once said Davos was like being back at university: Learning all day, enjoying yourself all night. It’s a reasonable description.

As the formal daytime sessions of the WEF draw to a close, the “fun” begins. Things get more relaxed, delegates open up a little bit more. In my experience, this is the best time to get a word with the “masters of the universe” who make Davos their temporary home — with a glass in hand, or over a canape in one of the bewildering number of evening receptions.

Then — always the high point of the day — dinner. This can be quite a formal affair in one of the hotels of the town, or more impromptu — a chance meeting with a friend or contact that can lead to an evening over a fondue table or, as the Swiss seem to prefer, a big plate of full-blooded meat.

Post prandial, you might just feel like curling up in bed, but there is still the trek back through security rings to get the shuttle back to Klosters. Inevitably, you encounter other friends or contacts in the snowy streets, and have to take refuge in one of the many “nightcap” events. It is rare to get past the Belvedere Steinberger, the ground zero of Davos night-time relaxation, without being lured in.

By now, the cold, the altitude and the fatigue have well and truly kicked in. The conversation on the shuttle back to Klosters is distinctly muted, intermingled with the occasional snore. By the time you are dropped at your hotel or chalet, all you want is the warmth of your room and the luxurious duvet the Swiss make to perfection. After a few hours, it will start all over again.

As I said, I expect no sympathy.