The Portuguese government has raised the country’s monthly minimum wage by 20 euros to 505 euros.
The decision came after weeks of negotiations between unions and business leaders.
More than 600,000 people in Portugal earn the minimum wage, which is also taxed at 14.5 percent.
Carlos Silva, the head of one of the country’s main unions, said: “It’s almost meaningless for most Portuguese people to go from €485 to €505. But it’s a sign and it’s up to the economy, to the economic agents to take the necessary steps.”
The leader of one of the country’s other main unions, Armenio Carlos, claimed that “the agreement is too late and is insufficient. The minimum wage is being used as an exchange currency. Employers are again being benefited by the State.”
The Portuguese government eased the financial burden on companies, which said the increase would discourage the hiring of workers. Social security contributions on an employee’s wages have dropped slightly from 23.75 percent to 23 percent.
Portugal has Western Europe’s lowest minimum wage.