Portugal is only creating low-wage jobs

According to data published by the National Statistics Institute (INE), net monthly salaries of €310 or less, a figure well below the minimum wage, are on the increase. Statistics reveal a 5.2% rise in salaries of less than €310, or 8,000 more employees working below the poverty line, based on figures collated between the second quarter of 2012 and the same period this year.

Madeira and the north of Portugal have been identified as the regions experiencing the greatest expansion of low salaries, due to the increase in part-time positions. Madeira has seen its part-time workforce grow by 23% while the North has recorded a 14% increase.

Conversely, the number of contractual employment recorded over the same period decreased by 4%, a fall in real terms of 146,000 jobs.

On a national level, those employees earning between €1,800 and €2,500 a month fell to almost 26%, noted the INE report.

Despite the low salaries, and taking into consideration temporary and seasonal contracts drawn up over the summer, the employment sector has seen signs of recovery over this time last year.

“The estimated unemployment rate for the second quarter of 2013 was 16.4%. This figure is 1.4 percentage points higher compared to the same quarter in 2012, and lower by 1.3 percentage points to the previous quarter,” said the INE.

Therefore, the report added, over the quarter the number of out of work decreased by 7% to 886,000 people. Employment also recovered in the first three months of the year: 72,000 new jobs were created (a rise of 1.6%), the biggest increase since 1998.

The INE warned however that employment market recovery during the second quarter is always to be expected, due to tourism companies hiring additional staff on short-term low-salaried contracts during the summer season, and the data published confirms this trend.

It’s for this reason that Minister for the Economy António Pires de Lima and Employment Minister Pedro Mota Soares spoke of “caution” and “prudence” regarding exaggerated figures.

“Caution is needed when assessing this data because of the necessity to rule out the effects of seasonality,” said Pires de Lima.

Indeed, unemployment in Portugal remains high, especially among 15 to 24-year-olds, this being the age group most commonly employed during the summer season but then subsequently laid off, representing a drop of 5%. In fact, the unemployment rate of this age group remains one of the highest in Europe, 37% of all active young people, or 141,000 without work.

A good example of this seasonal employment-unemployment rate is found in the Algarve, noted the INE. In a region whose economy is essentially based on tourism, employment increased by 5.7% and then decreased by more than -17.3%.