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Portugal — Income for young people falls faster than inflation

18 January 2010

The latest figures from the National Statistics Institute (INE) reveal that wages for the 25 to 34 year olds have fallen by -2.8% in the third quarter of 2009 when compared to the same period in 2008.

Whilst inflation has also fallen by -0.3% during the same period, the purchasing power of young people in Portugal has decreased due to the influence of the economic crisis.

Marcelino Pena Costa, President of the Association of Private Employment Agencies (Apespe), told Diario de Noticias "there is no wage progression anymore. Graduates would in the past start at 800 Euro per month and within a few months their income would go up to 1,000 Euro and then 1,200 Euro. That is no longer the case."

INE figures show that 1.1 million young Portuguese workers received an average of 706 Euro per month compared to 726 Euro a year earlier.
Anabela Carneiro, Professor of Economics at the University of Porto, believes that the economic crisis and negative wage growth for young people are directly related. She said "it is well documented that during recessions companies tend to retain more skilled workers and lay off the least qualified."

Jose Reis of the University of Coimbra said "those who are seeking employment are on the defensive and they understand that their vulnerability has increased. There are fragile groups in the economy and one of them is the young."



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