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.”


Deal on oil cuts ‘close’ as Saudi Arabia enlists G20

Updated 07 April 2020

Deal on oil cuts ‘close’ as Saudi Arabia enlists G20

  • ‘Virtual’ energy summit on Friday in new effort to stabilize market

DUBAI: Saudi Arabia plans to use its presidency of the powerful G20 group of nations in efforts to restore balance to global oil markets.

The Kingdom is organizing a special meeting of G20 energy ministers — including the other two biggest producers, the US and Russia — to discuss cuts to output.

The “virtual” summit is scheduled for Friday, the day after an OPEC+ meeting of oil producers. Crucially, the US, which is not an OPEC member, will be involved in the G20 summit, energy secretary Dan Brouillette said.

The initiative emerged after a weekend phone call between Prince Abdul Aziz bin Salman, the Saudi energy minister, and Fatih Birol, executive director of the International Energy Agency. The involvement of the G20 is part of the group’s remit, Birol told Arab News on Monday.

“The job description of the G20 is to provide and maintain financial stability, so it is in line with their aims,” he said.

Opinion

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“The oil industry is going through one of the worst times in its history, and this could have major implications for the global economy, financial markets and employment. Saudi Arabia has been a stabilizing factor in the markets for many years.”

Saudi Arabia and Russia were “very, very close” to a deal to cut oil output, said Kirill Dmitriev, chief executive of the Russian Direct Investment Fund and a close confidant of President Vladimir Putin. An agreement would “bring so much important stability to the market,” he said.

Nevertheless, significant challenges remain. So far, talks between OPEC+ members have focused on a cut of about 10 million barrels per day. This would not be enough to outweigh global market oversupply estimated at more than 20 million barrels, amid a demand slump caused by the coronavirus pandemic.

There are also concerns about whether US producers would be permitted to take part in cuts. American antitrust law prohibits cartel practices, which would rule out a concerted move by its many oil companies.

Some energy experts have suggested that action by the Railroad Commission of Texas, which regulates the energy business in the biggest US oil state, could help limit overall US output.

On the markets, amid the continuing uncertainty, Brent crude was trading about 5 percent down, at just over $32.