Understanding your destination country's labour market will place you at an advantage of understanding the employment situation there. Every country's labour market is different from others, and this article gives you insight into Portugal's labour market.
The total population of Portugal amounts to 10 631 100 (fourth quarter, 2008), with 48.4% men and 51.6% women. The working population is 5 613 900, the employed population stands at around 5 176 300 and the rate of unemployment was 7.8%. Unemployment remains higher among women (8.9%) and particularly young people from 15 to 24 years of age (18%).
According to the European Labour Force Survey (data for the third quarter, 2008), rates of activity (74.2%) and employment (68.1%) in Portugal are higher than the EEA average (71.4% and 66.5% respectively), the participation of Portuguese women in the labour market is still quite high (69.1%) compared with the EEA average (of 64.4%). As far as new forms of work organisation are concerned, part-time work is still limited (only 11.9% of total employment), and is particularly underused by women (17.1%) compared with the average of 30.7% of female employment recorded at EEA level.
The number of temporary employment agencies operating in the market is around 245.
At the end of January 2009, 447 966 people were registered as unemployed at the Job Centres, with 44.2% men and 55.8% women. Around 6.2% of these were unemployed foreign nationals. Of the latter, 3 117 were EU citizens (particularly from Romania, Bulgaria, Spain, France and Germany), while 6 236 were from countries of Eastern Europe (particularly the Ukraine – 4 269 unemployed – Moldavia and Russia).
A sectoral analysis of employed labour at the end of the fourth quarter of 2008 gives an idea of the country’s employment profile: agriculture, forestry and fisheries represent 11.4% of the employed population; industry, the building trade, power and water 29.3%, and services 59.3%.
The tertiary sector has become increasingly important, particularly wholesaling and retailing (15% of total employment), property, rentals and business services (6.5%), and the hotel and catering sector (6.1%), while tourism is clearly the driving force of the economy and labour market. The types of tourist services offered have diversified significantly in the country’s various regions, from ‘sun and sand’ tourism to the organisation of events, adventure and nature tourism, cultural tourism, rural and residential tourism and spa tourism.
The establishment of the new activity of Call and Contact Centres and Shared Services Centres supporting a number of multinational undertakings in Portugal has also begun to create jobs.
Public services continue to represent a significant proportion of existing jobs (19.1%, including public administration, defence, social security, education, health and social work), although a net creation of jobs in the sector is not forecast in coming years.
Manufacturing industry (17.6%), though not one of the most dynamic sectors of the Portuguese economy, has certain more representative segments, not only in terms of employment (as regards quantity and the skills required), but also in terms of its contribution to the creation of wealth in the country, particularly because it is export-oriented:
• information and communication technologies, with a large number of small and medium-sized enterprises developing software for specific applications, for example, or even working in highly innovative cutting-edge technologies;
• the moulds sector in the Centre region, which is highly automated and flexible as regards small batch production processes;
• in life sciences, the pharmaceuticals industry and the emerging biotechnology sector;
• the automobile cluster (with the presence of makes such as Volkswagen, but also various component production plants;
• electrical and electronic equipment industries (semiconductors, electronic components for cars, low consumption electronic appliances, telecommunications/fibre optic networks);
• chemicals (oil refineries, plastics, fertilisers, hygiene products, pesticides, paint and varnishes, organic and inorganic chemicals).
However, in the current economic situation, even these more dynamic areas of activity are experiencing some difficulties and the creation of new jobs is decreasing. In recent months, the number of layoffs and collective redundancies has increased, especially in activities most geared towards exports, with some factories even threatened with closure, in particular in the automobile cluster and in the electrical and electronic equipment industries.
The labour market integration of immigrants in Portugal is characterised by rather favourable outcomes in international comparison. The employment rates of immigrants are higher than those of the native-born, for both genders. Indeed, employment and labour market participation of immigrant women is higher in Portugal than in any other European OECD country. The picture is less favourable with respect to unemployment, and immigrants have been disproportionately affected by the less favourable labour market situation in recent years.
The high labour market participation of immigrants is attributable to the predominance of labour migration to Portugal. The number of foreigners has more than doubled over the past decade, and this growth has been linked with large-scale irregular migration of persons coming to Portugal for employment, particularly at the end of the 1990s in the context of a construction boom. This acceleration of migration flows has been associated with a strong diversification of origin countries. Whereas past migration was predominantly from lusophone countries (i.e., Portugal’s former colonies in Africa – the PALOP – and Brazil), a large part of migration over the past decade has been from eastern and south-eastern Europe, countries with no apparent ties to Portugal.
Many of the more recent immigrants are quite qualified, but labour demand has been mainly in low-skilled occupations, particularly in construction. Partly as a result of this, a large part of high-qualified migrants work in jobs for which they are formally “overqualified”. This is the case for more than 80% of high-qualified migrants from eastern and south-eastern Europe. In this context, there have been two rather effective projects for the recognition of foreign health professionals. A mainstreaming of these projects should be considered, particularly for occupations in which there are current or expected future shortages. Likewise, a harmonised and simplified process for academic recognition would facilitate migrants’ entry into jobs which are more commensurate with their qualification levels.
Linked with the “overqualification” are large wage-gaps between immigrants and the native-born, in spite of the fact that immigrants tend to be higher qualified than the native-born (who have very low educational attainment levels in international comparison). Foreigners earn on average 20% less than the Portuguese. A wage-gap in the order of 10% or above persists even after controlling for a wide range of other factors that can influence wages such as gender, age, education, occupation and sector. At a particular disadvantage in this respect are immigrants from the PALOP, who also tend to have less favourable outcomes than other migrant groups regarding unemployment.
Legal weekly duration:
39 hours
Retirement age:
65
Working contracts
The work contract is governed by legal provisions and to a lesser extent by collective agreements and individual negotiation.
The formality of the work contract, and hiring and firing conditions are extremely rigid.
Minimum wage:
365.60 EUR
Average wage:
Average monthly gross earnings in Portugal was 1,088 EUR in 2007.
Social contributions:
Social security contributions paid by employers: 23.75 %,
social security contributions paid by employees: 11%
Social dialogue and involvement of social partners
There are 2 major Union confederations. The CGTP (very close to the Communist Party) always very critical of and challenging government measures, and the UGT (close to the Socialist Party and the Social-Democrats) more moderate although it criticizes, but often manages to come to a consensus with the government. Negotiations usually take place at the Conselho Económico e Social for social dialogue between Employers' Confederations, the Government and Union Confederations. These discussions take place systematically at the beginning of each year, but also when important dossiers about labor law are discussed, as is the case at the moment.
Unions:
CGTP,
UGT
Unionization rate:
18.4%
Labor regulation bodies:
Ministry of Agriculture,
Confederation of Portuguese agricultural cooperatives (CONFAGRI),
Portuguese Agricultural Federation,
Ministry of Labor
Source: Europa, Emporikitrade, Oecd
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