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Internal devaluation and economic inequality in Portugal: challenges to industrial relations in times of crisis and recovery

Author

Listed:
  • Maria da Paz Campos Lima

    (234176Instituto Universitário de Lisboa (ISCTE-IUL), Centro de Estudos sobre a Mudança Socioeconómica e o Território, Lisbon, Portugal)

  • Diogo Martins

    (CES – 37829University of Coimbra, Portugal, University of Massachusetts Amherst, USA)

  • Ana Cristina Costa

    (234176Instituto Universitário de Lisboa (ISCTE-IUL), Centro de Estudos sobre a Mudança Socioeconómica e o Território, Lisbon, Portugal)

  • António Velez

    (234176Instituto Universitário de Lisboa (ISCTE-IUL), Centro de Estudos sobre a Mudança Socioeconómica e o Território, Lisbon, Portugal)

Abstract

Internal devaluation policies imposed in southern European countries since 2010 have weakened labour market institutions and intensified wage inequality and the falling wage share. The debate in the wake of the financial and economic crisis raised concerns about slow wage growth and persistent economic inequality. This article attempts to shed light on this debate, scrutinising the case of Portugal in the period 2010–2017. Mapping the broad developments at the national level, the article examines four sectors, looking in particular at the impact of minimum wages and collective bargaining on wage trends vis-à -vis wage inequality and wage share trajectories. We conclude that both minimum wage increases and the slight recovery of collective bargaining had a positive effect on wage outcomes and were important in reducing wage inequality. The extent of this reduction was limited, however, by uneven sectoral recovery dynamics and the persistent effects of precarious work, combined with critical liberalisation reforms.

Suggested Citation

  • Maria da Paz Campos Lima & Diogo Martins & Ana Cristina Costa & António Velez, 2021. "Internal devaluation and economic inequality in Portugal: challenges to industrial relations in times of crisis and recovery," Transfer: European Review of Labour and Research, , vol. 27(1), pages 47-73, February.
    • Handle: RePEc:sae:treure:v:27:y:2021:i:1:p:47-73
    DOI: 10.1177/1024258921995006
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    References listed on IDEAS

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    Cited by:

    1. Oliveira, Carlos, 2023. "The minimum wage and the wage distribution in Portugal," Labour Economics, Elsevier, vol. 85(C).

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