The increase in the minimum wage helped to expel so-called “zombie” companies from the market, companies that are economically unviable, says Fernando Alexandre. For the professor at the University of Minho, the fact that these companies persist for a long time until they go bankrupt is a problem, as they take away the market from other companies.

“Many inefficient companies persist in the market for a long time. This is a problem because they are taking away the market, many with unfair competition, because they are not fulfilling their obligations", explains Fernando Alexandre, professor at the University of Minho, in a debate at a conference organised by CIP, in Porto and reported by ECO.

According to Fernando Alexandre, “One of the positive effects of the increase in the minimum wage was to accelerate the exit of these unviable zombie companies”. At an event by and for businesspeople, the academic said that “the companies that will truly transform the Portuguese economy do not yet exist”, arguing that it is necessary to create the economic environment that will give rise to new companies and allow them to grow”.

Pedro Siza Vieira, partner at PLMJ and former Minister of Economy, contradicted the idea that the economy had been stagnant in recent years. “Our economy was anything but at a standstill. We had a lot of shocks. The economy is very different from what it was at the beginning of the century.”

Still, he recognizes that, regarding the issue of wages, “it is not possible to raise wages without increasing productivity and it is not possible to pay European wages at third-world prices”. Therefore, it is necessary to produce products with higher prices, but “charging more for what you do implies having a greater capacity for differentiation in the market”.