Portugal’s €1,600 Minimum Wage Promise Overshadowed by Historic Union Strike

Portugal’s union movement has not seen such a busy week in more than a decade. While ministers tout a future salário mínimo of €1,600, opposition parties insist the promise is nothing more than a last-minute bid to sap momentum from the nationwide strike that swept through offices, factories and schools on 11 December.

Quick takeaways

• Promise of a €1,600 minimum wage arrived just 48 hours before the walk-out.

• Two rival labour confederations — CGTP and UGT — joined forces for the first time since 2013.

• Protesters say the government’s labour-law package, “Trabalho XXI,” chips away at job security.

• Economists warn that raising the minimum too far above current productivity could backfire.

A promise wrapped in politics

The announcement came via a prime-time TV interview: Prime Minister Luís Montenegro pledged to “work toward” a €1,600 floor pay and a €3,000 average wage. Left-wing presidential candidate António Filipe, backed by the PCP, labelled the move “a shiny distraction.” He argues that the objective “contradicts every budget line” approved since the centre-right coalition took office.

For many public-sector employees earning the official €870 national minimum in 2025, the figure sounded distant rather than generous. Filipe’s criticism quickly echoed through teachers’ WhatsApp groups and dockworkers’ union halls, feeding the sense that the government timed its pledge to fracture strike unity.

Historic walk-out unites rival labour centres

The last time CGTP and UGT marched under one banner, the troika still dictated bailout terms. This week’s stoppage shut down suburban trains in Lisbon, trimmed hospital services to Sunday levels and forced dozens of councils to reschedule meetings. Union leaders claimed “solid” support; the government countered that most state offices kept minimum staffing.

Behind the show of force sits years of pent-up frustration. Although nominal pay has climbed roughly 36 % in the past decade, real wages grew far less once energy and rent spikes are factored in. Both confederations argue that a higher salário mínimo is welcome but meaningless without immediate relief from precarious contracts and irregular schedules.

What is inside “Trabalho XXI”?

Drafted by the Ministry of Labour, the 180-page bill bundles more than 100 changes to the Código do Trabalho. Key points include:

Longer trial periods for first-time hires in small firms.

Easier dismissal rules linked to technological redundancy.

A new category of “intermittent contract” for seasonal platforms.

Tax credits to firms that deliver certified training.

Unions call the package “21st-century Taylorism.” Business federations disagree, portraying it as a belated update that helps Portugal catch up with digital-era labour markets.

Crunching the wage arithmetic

• 2025 statutory minimum: €870.• Government target: +84 % rise to €1,600 (no timeline given).• Average salary today: roughly €1,380 gross.• Price growth over the last 18 months: 4.6 %.

The gap between minimum and average earnings worries some academics. If the floor grows too fast, argues Nova SBE economist Marta Vale, “you risk pulling the middle of the distribution down rather than pushing the bottom up.” Still, her latest paper finds “no statistically significant job loss” from past increments between 2015 and 2022.

How unions view the offer

CGTP’s general secretary Isabel Campeão dismissed the €1,600 pledge as “a PowerPoint slide.” She insists the focus must remain on a €1,000 minimum now, a 35-hour week across all sectors and tighter controls on overtime. UGT, traditionally more moderate, issued a similar statement: “We welcome every raise, but without a calendar the figure is fiction.”

Back-bench MPs from PS, BE and Livre added their own math. They calculate that reaching €1,600 by 2030 would demand annual increases above 10 %, far ahead of projected productivity gains. The ruling coalition has yet to publish any costing exercise.

Economic voices: between ambition and caution

The Bank of Portugal’s latest bulletin flags a structural concern: 23 % of employees already earn the legal minimum. Pushing the floor closer to the median risks compressing wage ladders, a dynamic that “may hinder talent retention in export-oriented SMEs.” On the flipside, the same bulletin recognises that minimum-wage hikes since 2014 trimmed the Gini index by nearly a full point, softening inequality.

Private-sector executives remain split. The Portuguese Retail Association fears “price-pass through” in supermarkets, while tech start-ups — usually offering higher entry pay — say the move would “level the field” and spur consumption.

Why households should care

Energy bills, mortgage rates and food staples eat up a growing share of disposable income. An immediate increase to €1,000 would lift the annual take-home pay of minimum-wage workers by roughly €1,400 after tax — enough to cover two months of average rent in Braga or one year of school meals for a child in Setúbal. Whether the disputed €1,600 horizon materialises could determine how millions plan mortgages and childcare over the next decade.

What happens next

Parliament is scheduled to open committee hearings on Trabalho XXI in early January. Meanwhile, union leaders warn of a fresh round of sector-specific strikes if no compromise emerges. The prime minister maintains that “dialogue is ongoing,” yet refuses to set a calendar for the headline wage objective.

In the short term, public perception may hinge less on policy detail and more on kitchen-table arithmetic: will pay-packets keep pace with supermarket receipts? As the political theatre unfolds, that is the question most Portuguese families ‑ and their pay slips ‑ will keep asking.