Taking a look at Poverty evolution in Portugal

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Portugal, one of the tourists’ favorite destination, known, among other reasons, for its good weather, nice food and caring people, is a country with 10.5 million people, 11% of unemployment (more than 55% of which corresponding to long-term unemployment) and whose household and Government debt surpass 134% and 149%, respectively. In fact, despite being one of the countries where people work more, the labor compensation per hour worked is among the lowest in Europe, being this a crucial factor when analyzing the overall country’s condition.

If one looks at the most recent data, it is possible to confirm that, among the European Union, Portugal appears as a leading country regarding both the poverty rate (corresponding to a 0.18 ratio) and the poverty gap (0.355 ratio), solemnly behind Estonia, Spain, Greece and Latvia. In order to tackle this and other issues on the society spectrum, the Portuguese Government allocates more than 24% of the national GDP to social purposes.

Poverty is considered a precarious situation of scarcity, which most of the times arises due to economic and financial circumstances. Has this concept been impacting the Portuguese society the same way in the past decades?

Taking a look at the national history data, one can see that, during the conservative dictatorship period (Estado Novo), which lasted from 1933 to 1974, although poverty was widespread, affecting almost 40% of the Portuguese population, it was not a great reason for policy concern. However, with the democratic Revolution of 1974, a modern welfare state was introduced, creating a set of important social rights. In 1980, more than 15 million of European households and 49 million individuals lived under the poverty line – the majority were elderly people and children. At the time, all European Union countries presented some degree of poverty and social exclusion, according to the European Commission criterion used (household that had a monthly income correspondent to 50% or less than the average monthly national household income, weighted for the household size). The Southern countries were the worst in terms of poverty rates and, from 1980 to 1985, some showed no poverty reduction – one of these was Portugal, that had almost one third of the national citizens and households living in such circumstances. After Portugal’s entry to the European Union (1986), the country assisted to a boost in anti-poverty measures, aimed at specific groups. In 1991, a shift in the poverty risk occurred, aimed at large families, isolated people and poorly qualified individuals. Despite the efforts, in 1993, Portugal was still remaining above the EU poverty rate average.

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From 1980 to 2000, a great increase in the level of social spending was verified and, during the nineties, with the introduction of more significant measures and policies on integration (mainly aimed at employment, income redistribution, professional training), the country assisted to a decrease in poverty. This topic was put at the center of the national agenda, having been created the Rendimento Mínimo Garantido, a minimum income scheme, in order to ensure an acceptable living standard. Still, Portugal was considered, in 2002, the country with the highest poverty rate among EU countries (with 23% of poor people), at a time when the Eastern countries were not yet part of the EU.

Nowadays, traditional forms of poverty, associated to isolation and aging, have been stabilizing and decreasing in Portugal, due, among other reasons, to the decline of retired people without any career contributions to Social Security – who used to receive little pensions. A relevant indicator of the social changes that occurred in the last few decades is the decrease in elderly poverty (with more than 65 years old), which dropped by 31%, between 2003 and 2010. However, a new poverty phenomenon has been challenging the society, associated to labor market changes, such as temporary work, and demographic and social changes, from which the longer life expectancy is an example.

In my opinion, it is urgent to fight poverty in order to attain a fairer and better society and, for that purpose, several policies and measures should continue to be carried on, creating solutions that fit the needs. In developed countries, as the case of Portugal, those issues can be addressed via, for instance, provision of benefits in kind, further increase of the national minimum wage, better implementation of progressive taxes and investment in employment conditions. Particular attention should be given to the increase of the national minimum wage, as it must be sustainably supported by healthy organizations and companies, able to pay their employees that higher amount.

Beatriz Jesus, Master in Management student at Nova SBE

Figure 1 – pobreza portugal – (2017). Google.pt. Retrieved 12 April 2017

Figure 2 – Poverty, social exclusion and health in Portugal. (2017). Sciencedirect.com. Retrieved 13 April 2017

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