ILO recommends policies to create decent and productive jobs

The following is a translation of an interview with Aurelio Parisotto, ILO Head of the Country Policy Development and Coordination Unit/Employment Policy Department, that appeared in Diario de Noticias on 15 October to mark the launch of the ILO report on Decent work in Portugal 2008-18: From crisis to recovery.

Question: Following the crisis, the Portuguese lost labour rights, the wages decreased and precariousness increased. Do you think that currently most of the jobs in Portugal are decent and ensure social cohesion?

The recent years have seen a solid economic recovery, prompted by strong exports, restructuring of enterprises and banks, and a policy shift away from austerity. Portugal is now growing at a slight higher pace than the EU average. The positive effects on the labour market are increasingly visible. Unemployment and underemployment are declining significantly, less people remain inactive because they lost their hope to find a job, and less are moving abroad in search of opportunities.

And it is not just the numbers. There have also been improvements in the quality of jobs vis-à-vis the darkest days of the crisis. A large part of the new employment generation in recent years consisted of regular jobs. The share of temporary workers – those who are at greater risk of precariousness - is now more or less at the same levels it was before 2008. Wage inequality and poverty are declining, and the revamping of collective agreements shows that workers and employers are back to the negotiating table where they fully exercise their rights.

More can be done to ensure all jobs in Portugal are decent. For many young women and men the transition to a regular job is still a difficult one. But it seems to us the country is on the right path. As it concerns social cohesion, it is hard to measure it. But we perceived a growing sense of confidence among all those we talked with, that the country is ready to move ahead collectively.

Question: What still needs to be done so that the Portuguese people can really have decent jobs? What recommendations would you make in this regard?

It will be important to maintain the current momentum in economic growth, avoiding to rush into a premature fiscal consolidation.

It will also be important to strengthen the pace of future growth by means of targeted efforts to promoting investment, innovation, technological progress and skills development. The quality of human capital is key to the country’s future. Portugal should not get locked into competition based on low wage. A combination of pro-employment macroeconomic policies and well-designed and monitored labour market policies can help unlock a virtuous circle of higher investments, higher incomes and decent and productive jobs.

Specific measures may help address gaps and vulnerabilities in the labour market for some groups - the youth, the long-term unemployed and those in temporary and precarious work.

Question: The report praises the role of social dialogue, do you think that it is the solution?

We definitely do think it is a critical part of the solution. Social dialogue is not a short-cut. It may take time and require effort, but it leads to carefully considered and balanced policy decisions. And it can ensure buy-in and commitment from the key actors, so that policy changes are effectively implemented. We think that the tradition and practice of social dialogue in Portugal has favoured the adoption of a mix of measures that facilitated the economic and labour market recovery the country is currently experiencing.

Question: And what about the collective bargaining, can we say that it will have a future bearing in mind the current context?

Bargaining between independent and representative organizations of employers and workers is a well-tested institution to make sure that the gains of growth are shared fairly and that wages grow in line with productivity. By this token, it helps a country stay on a positive and stable long-term development path. In our view, if you want to achieve such goal, collective bargaining is a practice that it is hard to replace.

In Portugal’s experience with the crisis, collective bargaining has met with many obstacles and several issues are left unresolved. But just to make an example, the extension of collective agreements has been instrumental in reducing wage inequality and foster inclusiveness. Like any institution, collective bargaining has to adapt and evolve in order to remain relevant. The report has some suggestions on how to improve the culture of collective bargaining in Portugal. For instance, maintaining the system of extension while promoting representation; broadening the scope to issues such as skills, training and productivity; improving articulation and coordination of agreements at different levels, to take into account the dominance of small firms in the economy.

To access this article in Diario de Noticias click here.