Labor

Portugal's Civil Servants Keep Their Jobs as Economy Struggles


Protesters march and shout slogans during a general strike in Lisbon on June 27

Photograph by Armando Franca/AP Photo

Protesters march and shout slogans during a general strike in Lisbon on June 27

On June 27, Portugal’s labor unions flexed their muscles. To protect benefits, including the 35-hour workweek in the public sector, the unions shut down Lisbon’s commuter train and metro system. Many Portuguese were not sympathetic. “It’s unfair for the public sector to have certain benefits that don’t exist in the private sector,” says Francisco Rodrigues, who runs a clothing store opposite the Parliament building. Portugal’s government employs 600,000.

Prime Minister Pedro Passos Coelho, whose government is at risk of falling, is trying to curb popular resentment over what opponents say is a widening gulf between private employees and public workers who have mostly stayed immune to mass job cuts.

State employees respond that they did not bring about the financial crisis that started five years ago, has driven unemployment to 18 percent, and caused the economy to shrink. Says Anibal Moreira, an official at a public workers’ union: “There is an ongoing campaign that blames civil servants for the country’s situation.”

Some civil servants, including judges and politicians, have avoided the drastic drop in living standards and retirement benefits that has harmed so many other Portuguese. The resulting anger is intense. “Today there isn’t a single member of the government who speaks in public without having to face protests,” says Pedro Magalhães, a politics researcher at the University of Lisbon.

In 2011 officials said they planned to cut the number of state employees by 2 percent a year from 2012 to 2014. That’s a fraction of private-sector job cuts. Former civil servants made up only 1.9 percent of the 700,000 unemployed workers in February, says Paulo Trigo Pereira, a professor at the ISEG School of Economics and Management in Lisbon.

In January the International Monetary Fund urged Prime Minister Coelho to trim spending on state workers’ wages and pensions, which together account for more than half of government expenditures that aren’t earmarked for interest payments. “It would seem impossible to generate the government’s spending reduction goals without changes in these two areas,” the IMF says in its report. The government is considering deep job cuts and a salary review for public workers. The cuts and other measures will affect about 30,000 state employees, Coelho said in a May 3 speech. One hurdle for the government is that labor law protects a large number of state workers from being terminated without disciplinary action or mutual consent, says Nuno Morgado, a lawyer in Lisbon.

For many politicians and constitutional court judges, the benefits that come from working for the state look set to remain intact. Some are eligible to retire after only 12 years of contributing to the state pension fund, compared with 40 years for the majority of the population, according to the websites of the Parliament and constitutional court. “There may be some careers in the state that have no parallel in the private sector and thus require specific treatment,” Luís Marques Guedes, the minister for parliamentary affairs, told reporters in May following a Cabinet meeting. “The principle of equality means one has to treat as equal what is equal and as unequal what is unequal.”

The same group of judges on April 5 blocked the government from suspending the payment of a month’s salary to state workers this year as it violated “the principle of equality” between those in the private and public sector, they said. “What’s really unfair is to have judges and politicians who are immune to the austerity measures imposed upon the majority of the population,” says António Marinho Pinto, chairman of the bar association, most of whose members are self-employed. “This is a scandal. Portugal cannot have first-class and second-class citizens.”

The bottom line: Civil servants make up a small fraction of Portugal’s 700,000 unemployed workers, despite the nation’s fiscal crisis.

Almeida is a reporter for Bloomberg News in Lisbon.
Jefferson is a reporter for Bloomberg News in Edinburgh.

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