Portugal “not ready” for minimum wage increase
18/11/2015
General elections in October produced no definitive result and there is still a lack of clarity over the shape of the new government of Portugal, but one possible outcome is a commitment to increasing the minimum wage from €505 per month to €550 from the start of 2016 and to €600 per month in 2019.
Reacting to this possibility, the most senior figure in the Portuguese footwear industry, Fortunato Frederico told local media that a small number of large footwear groups may be able to cope with the increase, but that the vast majority of shoe manufacturers in the country are not ready. Mr Federico, who is the founder and president of the Kyaia Group (whose brands include Fly London), said: “Most footwear manufacturers here are small companies that don’t have large capital reserves. It’s already a struggle for them just to get their clients to pay them what they are owed.”
He said he harboured concerns that such a measure could put some companies in difficulty, possibly even putting a question-mark over their future.
On the tanning side, rather than the footwear side, one prominent Chinese tanner told World Leather that increasing labour costs in his country were helping to make European tanners more competitive. He said he believed Italy would be cost-competitive with China by the end of the decade and that Portugal already was able to compete with China on costs.
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