According to the International Labour Organisation (ILO) if countries want to remain competitive are forced to raise prices whenever occur wage increases. The Journal News states, so that for a 1% increase in national wages should register an increase of 0.56% in prices.
According to the Journal News, the 1% increase in labor costs implies an increase in prices of 0.7%. This according to the International Labor Organization (ILO), which argues that there must be a balanced distribution between capital and labor, or you may give yourself a loss of competitiveness for price via.
Portugal, the share of wages in the national economy is 56.3%, so for a 1% increase in wages will need to raise prices by 0.56%.
“Labor costs are very significant for Portuguese companies. If we take GDP capital depreciation which is about 20% of GDP, we see that the final price of goods produced in Portugal, on average 70% are labor costs, number colliding seriously with the 15% advanced by the unions when ask for wage increases, “says, the Jornal de Notícias, Pedro Cosme Costa Vieira, professor of Economics of Porto.
That said, remember this daily that with the increase of 4% of the national minimum wage , which rose from 485 euros to 505 euros, prices would have risen 2.24%. However, for a total of 2.3 million workers for others, only half a million enjoys this increase, which is why there has been changes.
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