The start of the new year will bring wage increases to workers, namely 740,000 government employees and nearly 840,000 on the minimum wage, while there is also a 5% increase for the private sector.
The national minimum wage will increase by €60 to €820 in January 2024, representing a 7.9% update, the highest ever, according to the government.
The minimum wage increase exceeds the government’s inflation forecast for next year (2.9%) and is also higher than the inflation expected by the executive for 2023 (4.6%).
The increase in the national minimum wage was planned as part of strengthening the medium-term agreement on raising incomes, wages and competitiveness, signed in October between the socialist government and some social partners.
According to the latest data from the Ministry of Labor, in the second quarter of 2023, almost 840 thousand workers received the minimum wage, which is 20.8% of the total number of workers.
Public administration workers will again receive a 3% increase this year, with a guaranteed minimum of €52.63, and the remuneration base (the civil service minimum wage) will increase from €769.20 to €821.83.
In practice, civil servants with salaries up to €1,754.49 will receive an increase of €52.63, while those earning more will see their salaries increase by 3%.
The government expansion ensures that the state’s approximately 165,000 minimum wage workers will see an increase in purchasing power as the increase exceeds expected inflation.
The same thing happens for government employees at the next salary level, although the increase in purchasing power is lower since the percentage salary renewal decreases as the salary increases, up to 3%.
Government employees with raises ranging from 3% to 4.5% are losing purchasing power given the government’s inflation forecast for this year (4.6%). But given inflation expected in 2024, they will benefit.
In addition to increasing wages in government bodies, promotions and career growth, and replacement of daily allowance and transport allowances are planned.
The food subsidy remains at six euros without any updates in 2024, after increasing at the end of 2022 and again in 2023.
Regarding wages in the private sector, which are not regulated by the government (except for the national minimum wage), the agreement signed with the social partners provides a target increase of 5% for 2024, also above inflation.
In public administration, the annual increase in average total wages per employee was 5.5%, to 1,834 euros gross.
The annual increase, defined in the agreement between the Government and the social partners, aims to ensure that the average income per worker increases by at least 20% in 2026 compared to 2022.
The government’s goal was to increase the share of wages in gross domestic product (GDP) by a further three percentage points to at least 48.3% in 2026, in line with the European average.
Author: Lusa
Source: CM Jornal
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