Working Paper n.º 56/2017
Labour Market Reforms and the Crisis in Portugal: No change, U-Turn or New Departure?
13 | Março | 2017
PALAVRAS-CHAVE: labour market reforms; Portugal; crisis; troika
Drawing on quantitative and qualitative data, this paper studies labour market reforms in Portugal from 2000 to 2013. The paper examines how the main dimensions of labour market legislation (employment protection, security in unemployment, collective bargaining and activation policies) evolved in the period and specifically assesses the impact of reforms implemented during the sovereign debt crisis. We aim to show if, and how, such regulatory changes operated a remaking of the socioeconomic power balance in industrial relations.
The paper shows that the changes introduced during the troika years were qualitatively different relative to past reforms. Even if these reforms built on previous trends, we highlight three path-shifting changes. First, there was a sizeable reduction of security in employmentand in unemployment forworkers with permanent contracts(insiders). Second, at the same time, a significant decentralization of wage bargaining shifted the balance of power towards employers, while a move from joint to statutory regulation, stalled social concertation. Third, both these trends were not offset by any significant unemployment compensation strategy or activation effort targeted at outsiders: no recalibration occurred in a dualised labour market. Overall, this shift in the power balance between insiders, outside rand employers configures a new departure for Portuguese labour market relations. A worsened situation for insiders and outsiders indicates that there was both a flexibilization across the board and that segmentation endured, but now at a lower level of security. In conclusion, the austerity-driven reforms brought the Portuguese labour market to a liberalised dualisation.