The Path to Prosperity: A Policy Brief on Fostering Wage Growth in Portugal

As highlighted by thestudy on the evolution of the average wage, sponsored by Fundação Calouste Gulbenkian, Portugal suffers from wage stagnation.In fact, since 2002, wages in Portugal experienced anaemic growth, with a significant concentration of wages at the minimum wage. Such a lack of wage growth can have detrimental effects on the welfare of households, by contributing to depressed standards of living andpushing several households toprecarity. Yet, the dynamics of wage growth are very complex, and a thorough understanding of the determinants of wages requires a study of the effect of multiplefactors, such as productivity, labour marketconditions,employment, as well as policies.As such,this policy brief aimsatprovidingconcrete recommendations to promote wage growth in Portugal. We discussrich and actionable solutions to fosterhigher wage growth, increased productivityas well as better-quality jobs, always highlighting the trade-offs inherenttodifferent policies.