Like many countries across the world, Portugal was one of the nations in Europe significantly impacted by the financial crisis in the late 2000s. By 2009, the country began facing high levels of debt and a rising unemployment rate that, to this day, still weighs on the nation’s economy. While the Portuguese government attempts to understand how to help people in Portugal, much more needs to be done to address the country’s economic conditions.

Poverty and Unemployment
Since the beginning of the European debt crisis in 2009, Portugal has been affected by high levels of poverty, large instances of labor market segmentation and high unemployment rates.

In 2010, 18 percent of the population lived under the national poverty line, with certain groups affected more than others, such as women, children, ethnic minorities and the elderly. The incidence of poverty varies quite drastically between regions in Portugal. For instance, many areas in the northern region of the country have larger pockets of poverty due to the restructuring of the textile industry, while Lisbon may not see such a large impact, as its GDP nears the European average.

After joining the European Economic Community in 1986, Portugal experienced strong growth, decreasing interest rates and declining unemployment. However, with the economic problems faced in 2009, unemployment grew to over 10 percent by 2010, reaching a 24-year high.

By 2017, Portugal’s unemployment rate of 9.8 percent still lands the nation above the OECD average of 5.9 percent, yet the fall since 2010 has been quicker than the average across OECD countries. The main catalyst of the unemployment issues stretch beyond the recent debt crisis and are rooted in the country’s structural weaknesses.

Increasing the number of available jobs is one of the answers to how to help people in Portugal, as the country ranks in the bottom third of performers across OECD countries. The number of jobs has been decreasing in the nation since 2006 and is a major cause of the high levels of unemployment and poverty across the nation.

Portugal also needs to focus on improving the quality and inclusiveness of jobs. To improve the living conditions for Portuguese families, there must be a focus on improving earnings quality by increasing wages and reducing earning segmentation.

Certain groups are more likely to be employed on a temporary basis or through atypical contracts, which creates a barrier to inclusiveness in Portugal. This creates labor market segmentation and insecurity that also contributes to unemployment in the country.

Demographics
In addition to the effects on unemployment, the segmentation has also had a large impact on the country’s demographics and immigration of refugees. Portugal’s population is expected to shrink by 30 percent between 2015 and 2100 due to low fertility rates, higher life expectancy and migration outflows. With the old-age dependency ratio expecting to more than double over the same period, the economy will suffer from low future earnings.

The government believes they have a solution for how to help people in Portugal instead of simply allowing the statistic to unfold. The economic strategy focuses on increasing the number of asylum seekers and resettled refugees welcomed into the country. By attracting more people to settle in Portugal, the idea is that openness will boost economic activity while also counteracting an aging population and falling birthrate.

While the people of Portugal support immigration, the labor market conditions, lack of immigration historically and segmentation within society discourage refugees from resettling in Portugal. Therefore, to help those looking for refuge, integration and employment prospects must be considered in policy formation.

Fortunately, there is also support beyond the political sector. Abou Ras was himself a refugee who resettled in Portugal and has formed the association “Families of Refugees” with other asylum seekers to help migrants adjust to life in the country.

With Portugal taking a proactive approach to the inflow of refugees, the country could benefit from its efforts in the long run. However, emphasizing the importance of improving labor market conditions is one of the best ways to help people in Portugal. This will not only improve the current living conditions of the population, but also improve the prospects for all those to come.

– Tess Hinteregger

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