The average net salary of employees has unequivocally broken the upward trend that had been going on for eight years.
According to data from the National Institute of Statistics (INE) published yesterday as part of the Third Quarter Employment Survey and analyzed by Dinheiro Vivo (DV), the quarterly net salary registered a 0.5% decrease in the months of last summer (July-September quarter), in what is the biggest drop since early 2014, when the country tried to get out of the adjustment program of the Troika and the PSD-CDS government.
Looking only at the summer quarter, this is the biggest setback since the first summer with the Troika, in 2011, when the austerity program kicked off.
As mentioned, the average net wage, a measure calculated on the income of nearly 4.2 million employees (TCO), has been gradually recovering since early 2014.
Between the end of 2021 and the second quarter of this year, it gained 28 euros, which amounted to 1039 euros net per month, the highest value in the INE series.
But in the third quarter, already affected by the weakening of the labor market (see later in this article) and by the environment of energy crisis and inflation affecting the start of much investment and demand, the average net wage of TCOs is expected to fall by five euros, late see the INE.
You have to go back to the beginning of 2014 to find a bigger quarterly setback (minus 8 euros, down 1%).
Politicians, top managers and bosses escape inflation
As an average for a large population (the aforementioned 4.2 million employees), the net wage calculated by INE contains several realities.
Breaking down by professional classes, it’s clear that the top group, made up of “legislative and executive representatives, administrators, directors and executive managers” pays the most, either in the quarter or summer of 2021.
On an annual basis, these top professionals achieved an increase of more than 11% in their average net salary, that is, they even gained in purchasing power, taking into account that the year-over-year inflation rate in July -September quarter was 9.1% (DV accounts).
Between the quarters, ditto. Top politicians and bosses report a net salary increase of more than 4%.
The group of ‘unskilled’ workers, those who earn the least, also managed to escape the escalation of inflation, albeit narrowly. The annualized net wage increase was 9.9% in the third quarter, but only 1.8% compared to the previous quarter.
The salaries of the highly qualified group (“specialists in intellectual and scientific activities”) virtually stagnated and increased by a meager 0.2% compared to the summer of 2021. The increase was 1.9% between quarters.
Large professional groups, with more employees, also fail to keep up with inflation. The net salaries of “technicians and intermediate vocational staff” increased by 5%. The “administrative staff” group received a pay increase of 2.4%.
The “personal, protection and security services and salespeople” workers, one of the most representative occupations in the economy, registered a year-over-year wage increase of 6.5%. Farmers and fishermen took home another 5.3%, about half of the summer inflation rate.
Labor market starts to falter
Yesterday, November 9, INE also showed that clear signs of a weakening labor market are beginning to appear, be it in work or unemployment.
Job creation in Portugal, for example, is visibly losing momentum and was only 1% in the third quarter compared to the same period in 2021.
This 1% advance is the worst record since the first quarter of 2021, but during that time Portugal was subjected to severe confinement due to high mortality and very high number of patients and hospitalizations related to the covid-19 pandemic.
As in the case of the unemployment rate, this evolution in the number of jobs is also the worst of the INE series in the same season of the year, excluding, of course, two completely different moments: the first year of the pandemic (2020 ) and the first two years of the Troika (2011 and 2012). In these two periods, employment plummeted.
According to our calculations, there was only net job creation in the group of employees. For the rest, all other professional situations go through complicated moments.
The number of isolated workers decreased by 4.6% (to about 459 thousand professionals in this situation).
It’s a drop practically on par with the 4.7% collapse that happened two years ago, in the third quarter of 2020, when the pandemic swept into the economy and forced the closure of businesses, especially small ones. Many of them never reopened, as is known.
The INE also shows that the number of self-employed persons acting as employers (ie what employs people) stagnated in the third quarter (0%).
The national unemployment rate also rose to 5.8% of the workforce in the third quarter of this year, despite the scorching summer in many activities, especially in tourism.
Apart from the first year of the pandemic (2020) and the first two years of the austerity program (2011 and 2012), according to the INE series, this is the first time unemployment has risen in the summer months in Portugal.
The rise in unemployment is mainly concentrated in the Greater Lisbon region and the North region.
Luís Reis Ribeiro is a journalist for Dinheiro Vivo
Source: DN
