Temporary jobs or jobs without contracts are common in Portugal. Almost half of the college graduates are unemployed. Their parents however have normal contracts. An overview of the problems in the Portuguese labour market:
14% of Portuguese workers are employed only temporarily and 3 of 10 Portuguese workers have no employment.
40% of high school graduates have no job. If you have a job, you earn only around 1,000 € per month. The average income in Portugal is 850 € (per month). Also 56% of the 15 to 34-year-olds still live with their parents.
On the other side there are protected jobs which base on secure contracts, with the best protection against dismissal. They have been established in the 1970s, but companies do not implement them anymore. Little by little companies created flexible contracts with few rights for employees. Due to this development the young generation suffered far worse terms than their parents’ generation.
Today, the labour market is segmented highly: there are just few people with very well-protected contracts and on the other hand many others who are skilled as well, have insecure contracts.
The EU Commission, the European Central Bank and the International Monetary Fund agree that Portugal must reform its labour market. The protection against dismissal has to be improved; working hours may be extended if required by companies.
The minority government of the now-retired Prime Minister José Sócrates wanted to determine the compensation payments for laid-off workers, with new contracts and create a new law which set a maximum amount of the compensation payments.
The EU Commission also recommends to invest in education, so that Portugal can offer more high-value goods and services.