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Without Migrants Some Sectors in Society Would Collapse

The Director of the Migration Observatory, Catarina Reis Oliveira, argues in a study presented this week, that without immigrants, some sectors of society would collapse.

Writing in the Observatory’s 2022 Annual Statistical Report, which contains indicators of the integration of this population, she wrote:

“Immigrants play a key role in the efficiency of labour markets, and it is clear that without immigrants, some economic sectors and activities would collapse.” 

In most European countries of immigrant reception, including Portugal, foreigners have “higher activity rates than national ones.” In this area, Portugal appears in the fourth position among the 27 countries of the European Union where foreigners have the highest activity rate: 75.5% in 2021, representing +17.9 percentage points than that in Portuguese nationals that year.

“However, foreigners continue to be, compared to nationals, more represented in the professional groups of the base (in 2020, 50.5% of foreign workers were employed in professional groups 7, 8 and 9, while only 38% of Portuguese workers fit into these same professional groups), although improvements were observed, having decreased the relative importance of foreigners in these groups compared to that observed in the previous decade.”

Thus, the majority of foreign workers are associated with economic activities of accommodation, (21.2% in 2019 and 15.9% in 2020, representing +13.3pp and +9pp than observed in Portuguese workers) and administrative economic activities and support services (21.5% in 2019 and 21.9% in 2020, representing +12pp and +13pp than Portuguese workers).

“The integration of foreigners into the Portuguese labour market still does not necessarily reflect their qualifications, and it is verified that foreign workers, compared to the Portuguese, have a higher percentage that does not use their qualifications in the functions they perform within the national labour market: by 2020, 11.4% of foreigners with higher qualifications (+7.7pp than national workers) were incorporated into the professional groups of the base, not using their qualifications in the activities they performed”, she warned.

In 2020, “imbalances in average basic pay” also persisted. Overall, foreign workers continued to have lower average salaries than the Portuguese (-6.7% in 2020 and -8.2% in 2019).

The report also stresses that, although the dominant feature in the Portuguese labour market is the permanent link, this “is not the main employment link for most workers of foreign nationality.”

In 2020 more than two-thirds of Portuguese workers on behalf of others had an unterm employment contract (69.8%), while in the case of foreigners only about one-third had this type of employment relationship (35.1%).

Among the main nationalities of foreign employers, there are Brazilians (26.7% of foreign employers registered in the Staff In 2020) and Chinese (16%).

Although foreigners continue to have higher unemployment rates than nationals, they have seen their unemployment rate and distance from nationals “slightly” in recent years.”

In 2020 the unemployment rate for foreigners from non-EU countries stood at 14.6%, with the unemployment rate of the total population being 6.7%.

In the last two years, there has been an increase in the impact of unemployment among foreigners in the total unemployed in Portugal (from 6.2% in 2019 to 9.8% in 2020 and 10.4% in 2021).

The evolution of unemployment in the last two years must, however, be framed by the impacts of the Covid-19 pandemic on the Portuguese economy.

“This increase is also seen in the growth of beneficiaries of unemployment benefits of foreign nationality: almost six times more in 2020, with an annual change rate of +440.5%, reaching the unprecedented value of 106,546 in 2020 (a similar increase was found among Portuguese people with +244.5% of unemployment benefit recipients in 2020), with foreigners representing 8.2% of unemployment benefit recipients in Portugal in 2020.”

As in other European countries, in Portugal resident foreigners are at higher risk of poverty and live with greater material deprivation.

In the reference years of the report, there was “an increase in the risk of poverty or social exclusion in both foreigners residing in Portugal and nationals”.

In 2020, the risk of poverty or social exclusion of foreigners in Portugal was 18.9%, rising to 35% in 2021 (+16 percentage points compared to the previous year, and +13pp compared to Portuguese nationals).

“Although from 2020 to 2021 there is a strong increase, the percentage of foreign residents in Portugal at risk of poverty or social exclusion is still far from the value assumed in 2015, when the risk of poverty of foreigners was 45.1% (that year +20 percentage points than that observed for Portuguese nationals),” according to the data included in the study.

“These results associated with greater vulnerability, poverty and deprivation of foreigners do not, however, induce their greater dependence on the social protection of the country,” she concludes.

Foreigners, compared to the total number of residents in Portugal, still have fewer beneficiaries of social benefits per total taxpayers: in 2021, in the case of foreigners, the ratio is 50 per 100 taxpayers, while for the total of residents the ratio is 77 beneficiaries per 100 taxpayers.

In 2021, foreigners came to represent 10.1% of the total taxpayers of Portugal’s social security system, “relative importance unprecedented” and “more expressive than you would expect”, given that “only represent 6.8% of the resident population.”

Concluding she said, “the foreign population residing in Portugal continues to play an important role in counterbalancing the accounts of the Social Security system, contributing to a relative relief of the system and its sustainability.”

Samantha Gannon

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