A general strike is scheduled to take place in Portugal on December 11, anticipated to have a “significant economic impact” with costs potentially “ranging between 600 and 700 million euros,” according to Carlos Brito, the President of the North Regional Directorate of the Order of Economists, to Notícias ao Minuto.
The financial implications of a strike are not easily quantified, but Brito explained that, “considering what is known from previous general strikes in our country, there is no doubt that the one on December 11 will have a relevant economic impact, primarily depending on participation levels and the effectiveness of minimum services.”
“Based on historical estimates adjusted to the current size of the economy, I can state that the direct and indirect costs of one day of stoppage, assuming a global participation level around 50%, could range between 600 and 700 million euros, stemming from production losses, service delays, mobility disruptions, and decreased consumption. However, it’s important to note that this impact will not be uniform, as some sectors will be more affected than others, and the same applies regionally,” emphasized the economist.
In practice, the “reduction in activity will be particularly noticeable in public administration, health, education, transport, and logistics, sectors with a significant systemic effect on the overall functioning of the economy.”
“For instance, the suspension of transportation services will significantly impact supply and distribution chains. This means that the cost of the strike comes not only from the losses caused by decreased economic activity on December 11. It also includes the long-term impact on consumer confidence, investment, and international perceptions of labor stability,” Brito indicated.
Which Sectors Will Be Most Affected?
Brito explained that the “most affected sectors will be those more reliant on physical worker presence,” but also noted that “in a labor struggle context, unions tend to target sectors that have a greater impact on the daily lives of Portuguese people.”
“Transport is perhaps the most emblematic case, with stoppages affecting millions of journeys, including those who initially did not intend to join the strike,” he mentioned.
Education is also highlighted, with the prediction that “many schools will close, significantly affecting the daily lives of numerous families.” The same applies to health and public services in general – such as finance, justice, social security, and local councils – which are expected to operate with severe limitations.
Are Some Regions More Affected Than Others?
Brito also stated that the impact “will certainly be deeper in regions with higher population density and a greater reliance on public transport and administrative services.”
“Therefore, the metropolitan areas of Lisbon and Porto are expected to be the hardest hit. Moreover, tourist areas like Algarve and Madeira might experience additional effects due to potential aviation disruptions, indirectly affecting hospitality, restaurants, and other tourism-related activities,” he explained.
It’s also noteworthy that the “Interior regions, although less affected in volume, may face increased difficulties accessing essential services, exacerbating existing frailties related to the limited offer of transport and public services.”
“It’s crucial to remember the major objective of the unions in calling a general strike: to create as much disruption as possible, not only in the specific domain of economic functioning but also in the lives of families,” Brito added in remarks to Notícias ao Minuto.
