The purchasing power of Portuguese workers, measured by the real average wage per employee (i.e. without taking into account the impact of inflation), has virtually stagnated for two decades or more, according to calculations by DN/Dinheiro Vivo ( DV) based on European Commission Union (EC) data.
It is the legacy of several years of stagnation, recessions, successive crises and the adjustment program that the country faced in 2022, when this new inflationary and energy crisis erupted.
Despite this past of crushing purchasing power, the Minister of Finance, Fernando Medina, preferred to focus on short-term contracts in the margins of the meeting of the Council of Finance Ministers of the European Union (ECOFIN) in Brussels. term problems deadline.
The minister defended that “our salary policy is the appropriate policy to meet the need to ensure purchasing power through the year 2023, without contributing to an increase in inflationary tensions”.
Shorter-term data from the European Commission also indicate that this will not be the case. Despite all the measures and support, the average real salary per worker in Portugal lost purchasing power in 2022 in 2022.
It was not one of the worst cases (in Spain the average loss would have reached 5% according to data from Brussels), but still Portuguese workers saw their purchasing power fall by 1.3% last year, a loss that will not be recovered this year , if EC forecasts are confirmed, pointing to an average real profit per capita of only 0.4%.
In other words, it is in line with the meager history of salary increases that have come into circulation since the turn of the millennium or since the euro.
In addition to this legacy of stagnation, which contributes to exacerbating inequality and poverty, Portugal appears in the ranking as one of the countries in Europe that has made the least progress in two decades.
Real wages per capita (per employee) increased by only 0.3% on average between 2002 and 2022. Even worse, only the cases of Belgium (0.2%), Austria (0.2%), Spain (-0.1%), Italy (-0.2%) and Greece (-0.4%) see the same DV calculations based on the database released in November as part of the Commission’s forecasts.
Ecofin endorses requests from the Commission
Yesterday, Jornal de Negócios recalled that on November 22, the EC recommended that something should be done to increase purchasing power, especially for less affluent or poor workers. It is a way of trying to halt the said rise of poverty and inequality, to promote a “more inclusive” society.
Ecofin agreed yesterday to endorse this message presented by the EC two months ago, in the context of the new European Semester policy review cycle.
For example, the ministers also believe that wage growth in 2022 was “well below inflation” and that wages in 2023 would not be able to keep up with the expected price increase. European inflation will have reached 8.5% in 2022 and should fall this year, but the projection still points to more than 6%.
Ecofin therefore concluded that something must be done. “Wage evolution needs a careful balance to protect workers’ purchasing power – with an emphasis on low-wage workers – but to prevent wages from fueling inflation and deepening competitiveness disparities across the eurozone.”
National governments must “support a wage evolution that limits the loss of purchasing power” of those who work, especially those who earn less, emphasizes the Ecofin council.
For Medina, “the policy we set today has an effective responsiveness from a salary and income point of view and in addition, we are doing everything we do from a fiscal point of view and to support the softening of the price increase.”
PR lowers expectations
Marcelo Rebelo de Sousa, the President of the Republic (PR), also tried to curb the wage wave. “Before inflation, on average close to 8% at the end of last year, there were wage increases of more than 7% and in some cases more than 8%”, but “the employers explained to me that this was already more complicated in other areas”, as in the case of “agriculture, some commercial areas,” he said, quoted by Lusa.
Luís Reis Ribeiro is a journalist for Dinheiro Vivo
Source: DN
