Rise in Foreign Workers in Portugal: A Decade of Growth and Economic Impact

The number of foreign workers in Portugal has surged over the past decade, increasing by an average of 24% annually. This growth has led to over 22% of national companies employing foreigners, nearly triple the rate observed in 2014.

According to a study by the Bank of Portugal (BdP), the number of foreign employees in the country rose by 35.5% in 2023, reaching 495,200, which represents 13.4% of the total workforce. In 2014, the average number of foreign workers was 55,600, accounting for just 2.1% of the workforce.

The demographics of foreign workers in Portugal reveal a diverse workforce. Brazilian employees make up the largest group, with 209,400 workers registered with social security in 2023, representing 42.3% of all foreign workers. Other significant groups include Indian (41,000), Nepalese (26,900), Cape Verdean (22,700), and Bangladeshi (18,800) workers.

The increasing presence of foreign workers is also reflected in the employment patterns of companies. The number of companies with at least one foreign employee has risen from 7% in 2013 to 22.2% in 2023. This shift highlights the growing reliance on foreign labor to fill various roles across different sectors.

Why this matters: The increasing presence of foreign workers in Portugal has significant implications for the country's economy and labor market. As labor shortages persist, the reliance on foreign labor may lead to changes in immigration policies and workforce development strategies.

Labor shortages in Portugal have created opportunities for foreign workers, particularly in industries such as agriculture, food and hospitality, manufacturing, healthcare, and IT. Over 30 occupations are currently facing shortages, which has driven the demand for foreign labor.

Despite the positive economic impact, foreign workers in Portugal face challenges, including lower wages compared to their Portuguese counterparts. In 2023, the average monthly pay for foreign workers was €769 for young workers and €781 for those over 35, while national workers earned €902 and €945, respectively.

The regional distribution of foreign workers shows a concentration along the coast, particularly in the metropolitan areas of Lisbon and Porto, coastal Alentejo, and the Algarve. This geographic pattern aligns with the locations of industries that heavily rely on foreign labor.

As Portugal continues to experience labor shortages, the influx of foreign workers is expected to persist. This trend not only addresses immediate workforce needs but also contributes to the country's economic growth and diversity.

Key Takeaways

• Foreign workers in Portugal increased by 35.5% in 2023, reaching 495,200.
• 13.4% of Portugal's workforce is now foreign, up from 2.1% in 2014.
• Brazilians make up the largest group of foreign workers, accounting for 42.3%.
• 22.2% of companies in Portugal now employ foreign workers, up from 7% in 2013.
• Foreign workers face challenges, including lower wages compared to Portuguese counterparts.