Portugal’s minimum wage has climbed for a decade, with nearly a quarter of the workforce now earning the base salary. Credit : Shutterstock, PhotoSGH

According to the central bank’s latest figures, 23% of Portugal’s workforce now earns the minimum wage—a notable increase that highlights how wage policies are influencing both new hires and existing employees.

The BdP’s report shows that the share of new employment contracts paying the minimum wage jumped by 1.8 percentage points between 2015 and 2022, reaching 31.4 per cent. This rise is most pronounced among workers with lower levels of education: those with primary education or less saw a jump from 38.8 per cent to 45.3 per cent in seven years, while employees with a university degree actually experienced a slight drop, from 9.1 per cent to 8.3 per cent. The trend is also more evident among foreign workers, with 43% of their new contracts offering only the national base salary, compared to 29 per cent for Portuguese nationals.

One reason behind this growth is that the minimum wage has been increasing faster than other salaries, creating what some experts call a ‘compression’ in the wage scale. As the base pay goes up, those who previously earned just above that threshold are effectively absorbed into the minimum wage category when annual adjustments take place.