Portugal's Socialists want to raise the minimum wage
In the run-up to the Portuguese parliamentary elections at the end of January, the ruling Socialists are campaigning with a promise to gradually increase the state-imposed monthly minimum wage for full-time jobs from 705 euros to 900 euros over the next four years. Commentators are critical of the initiative.
Don't burden the wrong businesses
Entrepreneur Filipe Charters de Azevedo warns in Dinheiro Vivo that the costs for small businesses are too high:
“If you raise the national minimum wage, it mostly hits the small business owner who runs a pub or a franchise laundry - someone who has a business just to pay wages. This is not a 'rich person'. By being unproductive, we as a country are making life difficult for those who help the poor - those who create jobs. ... There is a foolish idea here that if we put an end to small businesses, big, productive companies will soon emerge, ready to employ the poorest and the unemployed and give them big, good wages.”
Better to promote growth and cut taxes
The situation could become similar to that in Venezuela, Observador warns:
“The left has no idea how to raise average wages for the simple reason that its recipe for economic growth is always the same: increase the minimum wage and promote consumption. ... Does the left really want all of us to earn the minimum wage - which will then become the new average wage? That's what's called impoverishing the middle class, and would make Portugal more like Venezuela. ... Two things are needed for annual average wages to rise structurally in Portugal: substantial economic growth and a comprehensive tax reform that makes Portugal competitive and frees the country from the castrating burden of taxes on labour and capital.”