The president of Chega, André Ventura, has made a new proposal about government subsidies for minimum wage increase in Portugal. He believes the minimum wage should increase to bring it closer to one thousand euros. However, Ventura argues that the government should help companies with this increase by offering subsidies.
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Government Subsidies For Minimum Wage Increase
Ventura wants the government and the private sector to be careful and fair as they talk about raising the minimum wage for 2025. He talked about the need for a gradual increase in pay while on a visit to Tábua, a town that was hit by the recent wildfires in central and northern Portugal.
Chega’s proposal aims to boost the minimum wage to nearly 1,000 euros. But Ventura said the increase should not harm businesses. He explained that some companies particularly smaller ones will not have enough cash flow to handle higher wages immediately.
Ventura suggests that the state should offer financial support to businesses during the first few years of the increase to help companies adjust.
Ventura highlighted that without this support, many businesses might close. He emphasized that his party wants a minimum wage increase that is sustainable and realistic.
He said:
A State support grant for companies whose liquidity would not allow them to do so in the first few years, ensuring that they would remain open and pay this wage
Ventura thinks that negative outcomes may occur if the government just requires a higher wage without giving any help. Some businesses might not be able to pay the higher wage, so they might do illegal things like paying employees under the table to get around the law.
He stressed:
Therefore, it would be a supported minimum wage and not a merely stipulated minimum wage as the Government wants
Ventura said that an increase in the minimum wage by decree might seem like a good idea. But many companies won’t be able to pay it. He further argued that without financial backing from the state, some businesses would either shut down or find ways to avoid paying the official minimum wage.
Avoiding Business Closures Through State Support
Ventura’s main concern is that a sudden increase in wages will force small businesses to close. He proposes a government subsidy program to prevent such a situation.
Ventura said:
What happens? They close or start making a parallel payment circuit. That is the result, if there is no money to pay them.
Under this plan, the state would help cover the cost of wage increases for companies that can not afford to pay them right away. He believes this will allow businesses to stay open while raising their employees’ wages.
He wants to implement this because he thinks the government is taking too many risks. Without help, businesses could have big money problems which would hurt workers in the long run.
Ventura considers that a more gradual method will work better for an increase in wages, especially if the state supports it up.
Current Discussions On Government Subsidies
The government and social partners, including labor unions and businesses are still in discussions regarding the minimum wage for 2025. Maria do Rosário Palma Ramalho, Minister of Labor, Solidarity, and Social Security said during a recent meeting that the government is still working on an agenda. Though discussions are still continuing but no official decisions have been made as of yet.
Ramalho suggested that the government is open to considering changes to taxes and contributions on performance bonuses. This will allow companies to give productivity based rewards without increasing their overall tax burden.
The minister also suggested that the government might raise the minimum wage above the current goal for 2025, which is set at 855 euros.
Although no formal proposal has been presented yet but it is clear that the government and social partners are working toward a solution. The goal is to raise wages while also ensuring that businesses can afford the increase.
Ventura’s proposal highlights the importance of balancing wage growth with business stability. He argues that increasing salaries without support from the government will have adverse effects such as job losses and company closures.
In Portugal, where small and medium companies contribute to an important part of the economy, it is critical to find a solution that benefits both workers and businesses.
