Chronic labour shortage: almost every sector in Portugal struggling to find staff

This isn’t a problem caused by the pandemic, although it has been exacerbated by it: multiple sectors across Portugal are struggling to fill job vacancies. Hotels particularly have been hard hit – some not even able to reopen. AHP, the Portuguese hospitality association, is holding its national congress in the Algarve this week and this obstacle to recovery is expected to be high on the agenda.

Talking to AHP president Raul Martins, Público reports that the sector has a long way to go before it can get back to pre-pandemic levels of activity.

The government’s lay-off regime “helped maintain employment” within the sector, but “many people were made redundant”, explains Martins, and “there has been difficulty getting them to return”.

AHP’s ‘solution’ has been to push the government to create what it terms “labour import flows” – migratory corridors “with specific countries”.

Cape Verde is one of the Portuguese-speaking nations on the list, for the simple reason that it has “a good hospitality school (escola de hotelaria)”, its inhabitants are used to tourism and “want to come to Portugal”.

But to do so, there needs to be the necessary authorisation – and, so far, this hasn’t been forthcoming, says Raul Martins.

“Getting this going is proving complicated,” he told Público. “We are going to talk to the Minister of Foreign Affairs to tell him that he has to help.”

There is also an issue with Brazil, the AHP president explains. “We had many Brazilians working in the industry, and now we don’t have so many due to the inhibition provoked by the (Covid) vaccine. Vaccines accepted in people coming to work here have to be those approved by Europe, and the majority of Brazilians have been vaccinated with the Chinese vaccine, which is not approved (by Europe).

“The World Health Organisation recognises the Chinese vaccine. We have to make diplomatic efforts for Europe to recognise it,” he said.

Beyond Portuguese-speaking nations within the CPLP (Portuguese speaking community), AHP has identified the Philippines as another potential source for incoming workers.

In Raul Martins’ eyes, Filipinos are “Hispanics, and the majority are catholic, which makes it easy for them to integrate into our culture”.

AHP is in contact with the Ministry of Labour to “implement this circulation” of potential new job seekers.

The hospitality sector’s labour problems, however, are just a section of a much wider issue: companies everywhere are finding it difficult to fill job vacancies.

Henrique Tomé of trading platform XTB tells SOL online that “it is important to note that there still exist many government support mechanisms that are not incentivising people to seek work”.

He admits that State support is reducing, and that this may have a positive effect on the labour shortage.

But SOL’s overall message is that the shortage of labour within Portugal is acting as “a brake on (the country’s) recovery”.

The construction sector, for example, is short of 70,000 workers; factories making furniture cannot find machinists, metalworkers, upholsterers, and the forestry sector is desperate for labour.

SOL’s text, however, doesn’t even try to explain deep-rooted causes for this ‘nationwide shortage’. Economist Eugénio Rosa does.

Talking this week in the context of the government’s (possibly precipitous) announcement that the national minimum wage is to be increased to €705 per month from January 2022, he said Portugal “is transforming into a country of minimum salaries”.

The ‘salary distortion’ is seeing to it that the national minimum wage “represents an increasingly high proportion of the average salary”.

In short, there are more and more people receiving no more than the national minimum wage. The exact percentage is close to 70% of the nation’s workforce.

As Rosa explains: “There has been enormous political concern in recent years in increasing the national minimum wage, neglecting to update the wages of more qualified workers. This is causing strong distortions in the country and transforming Portugal into a place in which ever more workers receive only the minimum wage, or a salary very close to it.”

Dinheiro Vivo proves the point: IEFP (the institute of employment and professional training) has a list of over 150 job vacancies on its site at the moment, aimed at civil engineers, electro technicians, mechanics, agronomists “and others”. Yet the “crushing majority of salaries offered” vary between €750 and €1,000.

“How can the country hope to retain qualified people,” Eugénio Rosa queries – stressing that “without qualified workers, economic growth and the development of the country will be unrealistic”.

And here comes another problem: prime minister António Costa may have said that the government plans to increase national minimum salaries to €705 (a sum that many people will find it impossible to survive on from month-to-month), but business confederations warn there still need for this to be ‘discussed’.

The representatives of tourism, agriculture, commerce and industry want to understand how the government has arrived at this figure, and how it expects businesses to be able to afford the increases.

Confederations are also demanding that promises made in return for previous increases in the national minimum wage be honoured.

These include the government pledge to “update prices for public contracts” (so that employers too can look forward to increased receipts). This pledge was made back in 2020 and, as we approach 2022, nothing has moved forwards.

In other words, yes, the country is being ‘held back’, in part, by a shortage of labour – but anyone keen to make a life may aspire to a job that actually enables them to make ends meet.

As the study “Poverty in Portugal”, promoted by the Francisco Manuel dos Santos Foundation, explained earlier this year, one in five Portuguese citizens is on the breadline. “And the majority of these people are not poor because they do not have a job, or because they depend on State support to reduce (the impact) of no salary,” wrote Observador. “They are in a situation of poverty because they earn low wages or have precarious jobs.”

For all the AHP plans of “labour import flows”, one has to remember that hotels need staff desperately in the spring and summer months. In the winter, they invariably lay people off.

That too could be described as “a brake on recovery” – perhaps not for the country, but for the individuals involved.

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