Minimum Wage Increased in Portugal, But What Do the Numbers Tell Us?

In recent years, we have seen frequent progress in Portugal when the minimum wage is discussed. With the steps taken since 2017, the numbers have moved upward; However, when we look at Europe in general, we clearly realize that the table is not at the top as claimed.

What About the Numbers?

The monthly minimum wage, which was 557 euros in 2017, increased to 920 euros by 2026. An average annual increase of 5.7% was achieved, which is not bad compared to the stagnant period in the past.

However, the issue is not just how much Portugal has increased, but how far other countries have come. Among the 21 countries with a legal minimum wage in the EU, Portugal can only rank 13th in terms of increase rate. Moreover, all Eastern European economies, including Spain, took much faster steps than Portugal in this process. In terms of absolute value, we rank 12th among 22 countries; So we stay somewhere in the middle.

Minimum Wage and Median Wage Convergence

One of the most sensitive points here is that the gap between the minimum wage and the median wage is gradually narrowing. According to OECD data, Portugal ranks high among the European countries with the highest of these two wage rates.

Although the Central Bank says that these increases play a role in reducing inequality, as someone working in the field, we can see that the fact that the minimum wage and average salaries are so close to each other creates serious questions in terms of efficiency and motivation. While people strive for more qualified jobs, the fact that the compensation they receive is so close to the minimum wage has become one of the biggest dilemmas of the system.

What Will the Coming Years Show?

Plans for the coming period have already begun to become clear. According to the agreements made, the targets are listed as follows:

2027: 970 euros

2028: 1,020 euros

2029: 1,100 euros (Government target)

Let's see if these increases will be enough to put a smile on the faces of employees in the face of high cost of living, or will the gap close even further and trigger other economic imbalances? Time will tell.

Source: Journal of Economics / Jornal Económico (Eurostat and OECD data)

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