Portugal had 7th highest real minimum wage increase in the OECD
This is one of the conclusions of the Paris-based organization's "Employment Outlook" for 2024.
Between May 2019 and May 2024, the Portuguese minimum wage rose 36.7%, which, according to the Organization for Economic Cooperation and Development (OECD), corresponds to a real increase of 17.5%.
Data contained in the Paris-based organization’s "Employment Outlook" for 2024 shows that this was the seventh highest real increase of the 30 countries.
During the inflationary crisis, lower wages grew more than higher ones, which is related to policies relating to the minimum wage, which in Portugal is particularly relevant as it covers around a fifth of workers.
"In almost all countries, the real value of the minimum wage is already above the level it was in 2019 thanks to automatic and discretionary adjustments", the report reads.
In the Portuguese case, the nominal evolution is explained by the fact that the minimum wage went from 600 euros per month in 2019 (which, as it is paid 14 times, amounts to 8,400 euros per year) to 820 euros in 2024 (11,480 euros per year ).
In annual values ​​(which are the ones that count, as not in all countries it is paid 14 times) the nominal difference is 36.7%. Actual values ​​are calculated by the authors based on inflation.
In the same period, the biggest real gains were recorded in Mexico, Turkey, Poland and Latvia (as the graph illustrates). The smallest ones were observed in the United States (at federal level), in Israel, in the Czech Republic and in France.
Evolution above the OECD average
Confirming the tendency for greater increases in low wages, to the detriment of medium or high wages, the OECD also looks at wages across the economy as a whole.
The first observation is that in the overwhelming majority of countries real wages were already in positive territory in April of this year, in year-on-year terms. This is in 29 of the now 35 countries analyzed – including Portugal.
This is essentially explained by the slowdown in prices, combined, for example, with increases in the minimum wage and the situation of the labor market itself, which in general has historically low unemployment levels.
The OECD also seeks to assess whether, in general, hourly wages have already recovered the real value they had in 2019. In Portugal, between the last quarter of 2019 and the first of this year the variation was also positive (5.5% ), the new highest value in 35 countries, above the OECD average (1.5%).