Labor rigidity in Portugal hinders mobility and opportunities
Labor reform returned to the center of debate between government, employers and unions. But, more than the positions in confrontation, it is important to look at the data. And the data shows a persistent problem: Portugal continues to have a rigid and segmented labor market in relation to the European Union average.
One of the clearest signs is the cost of dismissal for objective reasons, which in Portugal is among the highest in the EU. Added to this is the fact that workers stay in the same job for a long time: Portugal is one of the European countries where this average duration is highest. Although stability may seem positive, it may also reveal a less dynamic market, with less mobility and ability to adjust.
There are other indicators that point in the same direction. Long-term unemployment remains high, showing the difficulties in reintegrating those who lose their jobs. At the same time, involuntary temporary contracts have significant weight, a sign that many workers are not in temporary contracts by choice, but because of a lack of alternative.
The mismatch between training and employment also deserves attention. Portugal appears among the European Union countries where the most young adults perform functions without connection to their field of study. This reveals weaknesses in the articulation between the educational system and the job market, with a loss of talent and lower use of qualifications.
Labor rigidity also has an evident generational dimension. Young people face much higher unemployment rates than other age groups and are much more exposed to precariousness. In Portugal, the weight of fixed-term contracts among younger people is among the highest in the EU, reflecting a generational inequality in labor protection: while some are more protected, others bear a large part of the insecurity. Protecting jobs is important. But protecting jobs cannot mean blocking opportunities, making transitions difficult or pushing younger people into weaker relationships. A fairer and more functional labor market requires rules that combine protection with mobility, adaptation and creation of opportunities, promoting higher wages and a more dynamic economy.
- Facts viewed through a magnifying glass by André Pinção Lucas e Juliano Ventura – A partnership between POSTAL and the Institute
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