The Portuguese Basket
In 1980 the average Portuguese household spent a little over a quarter of a million escudos a year, more than a third of it on food. Priced item by item at today’s prices, that basket costs about €15,500, and at today’s minimum wage it takes half the hours of work it took then. Most of what a household bought in 1980 became much cheaper in hours of work. A few things did not: eating out, education, and above all the home, whose price has moved with wages over four decades but swung violently around them.
The Fifteen-Hour Week took the American consumer basket of 1977, priced each of its 197 categories at 2025 prices, and asked how many hours of work it now takes. The answer was about half of what Americans consume today, 17 or 18 hours of a 34-hour week. Its list of open threads noted that the exercise was American, and that the Portuguese household budget surveys, which go back to 1980, and the consumer price index by category would allow the same question to be asked for Portugal, where housing and the minimum wage have followed very different paths.
This essay does it. It takes the first national household budget survey, of 1980/81, prices each of its fifty-odd lines at 2025 prices, and measures the result in hours of work at the minimum wage and at the average wage. It then looks separately at the home, which a price index handles badly, and at what a mortgage has cost against wages since 1990.
What a Portuguese household bought
INE’s household income and expenditure survey ran from March 1980 to February 1981 and covered 8,041 households on the mainland. The average household had 3.3 members and spent 261,651 escudos a year, including what it grew for itself and the imputed rent of the home it owned.[1] Leaving out fees, fines and pocket money, which are not consumption, it spent 254,263 escudos, about €1,270 at the conversion rate.
The basket was that of a poor country. Food took 37 per cent, clothing and footwear 10, the running of a car or motorbike 9, furnishings and household goods 9, and housing, including the rent imputed to owners, only 6, because most rents were frozen and many homes were owned outright or lived in rent-free. Health took under 3 per cent, education under half of one per cent, restaurants and cafes 6.[1] Forty years later, the 2022/23 survey found a household of 2.16 people spending €23,900 a year, with housing, most of it imputed rent, at 39 per cent and food at about 13.[2]
Priced line by line with INE’s consumer price index for each category, which the institute has carried back to 1948, the 1980/81 basket costs about €15,500 at 2025 prices, a multiple of 12.2 on its nominal value; the all-items index would give 12.8, because the basket was heavy in the things that became relatively cheap.[3] Per person that is about €4,700 a year. Today’s households, in the latest survey brought to 2025 prices, spend about €11,900 a person, two and a half times as much; the national accounts give almost exactly the same multiple for real consumption per head since 1980.[3][4] The Portuguese of 1980 consumed about 40 per cent of what the Portuguese consume now, less than the 51 per cent the same exercise gives for Americans of 1977.
The basket in hours of work
The minimum wage was 7,500 escudos a month at the start of 1980 and 9,000 from October, for 14 payments a year, and did not yet cover farm or domestic workers, who had lower rates. The normal week in collective agreements was typically about 45 hours. In 2025 it was €870 a month, for a week of 40 hours.[5] Allowing for the shorter week, the hourly minimum wage rose about 24 times between the survey period and 2025; average pay, measured by compensation per employee, rose about 29 times; consumer prices about 13 times (Figure 2).[5][6]
At the minimum wage, the average household’s annual basket of 1980/81 took about 4,500 hours of work then, 2.2 years of full-time work. It takes about 2,300 hours now, 1.3 years. Today’s actual basket, much larger, takes about 3,800 hours, 2.1 years: in hours of minimum-wage work, the average household now consumes about what it did in 1980, and gets two and a half times as much for it. Per person, counting children, the 1980 basket costs about 690 hours a year at today’s minimum wage, or about 15 hours a week over a working year of 45 weeks: Keynes’s fifteen-hour week, if the Portuguese were content to live as they lived in 1980.[3]
Per person, the 1980 basket costs about fifteen hours a week at today’s minimum wage: Keynes’s figure, for the life of 1980.Author’s calculation from INE, IRDF 1980/81, and the INE consumer price index
The averages hide very different paths for different things (Figure 1). Radios, televisions and similar goods take about a tenth of the hours they took in 1980, post and telephone and clothing about a fifth; package holidays, where they were bought, a fifth. Furnishings, cars and food take a little under half; fuel and the running of a car about half; health about 60 per cent. Rents, as the price index measures them, take about two-thirds, and household energy about four-fifths. Restaurants and cafes take almost the same time as then, recreation and cultural services exactly the same, and two things take more: education, about 40 per cent more hours at the minimum wage, and tobacco, 60 per cent more, because of taxes.[3]
The pattern is the one the American essay found, and the explanation is the same. What became cheap is what factories and machines make: electronics, clothing, cars, appliances, and food, whose production was transformed. What did not is made of people’s time, as in restaurants, schools and theatres, or of taxes, as in tobacco. The Portuguese difference is in the weights. Food, clothing and household goods were half of the 1980 basket, so the fall in their cost in hours did more for a Portuguese household than for an American one; and education and health, the dearest items, were a much smaller part of it, because the State provides them.
The item the index cannot see
The weakest line in this exercise is the home. In 1980 rents were frozen for most sitting tenants, and a household that owned its home was imputed a rent to match. The rent index, which follows existing leases, rose about 15 times from 1980 to 2025, a little faster than prices; but a family looking for a home today does not pay the rent of a lease signed in 1975. It pays the market, and the market is measured by house prices, which in Portugal are only available from 1988.[7]
Over the whole period since 1988, the result is surprising: house prices rose about 6.5 times, and so did wages, the minimum wage 6.4 times and average pay 6.7 (Figure 3). Over thirty-seven years, a home cost about the same number of years of work at the end as at the beginning. What happened in between is the story. Until 2007 prices rose roughly with the minimum wage and more slowly than average pay; they then fell for six years, and from 2013 more than doubled in a decade, while average pay rose by about a third and the minimum wage by about half.[7] At the median valuation, a 90 m² home cost about 15.6 years of the minimum wage in 1990, 9.5 years in 2013, and 15 years again in 2025; at average pay, 7.8, 4.2 and 7.9 years.[8]
Price is only half of what a buyer pays; the other half is interest, and that moved even more. In 1990 the rate on long household loans was about 19 per cent. On an 80 per cent, 25-year mortgage for a 90 m² home at that year’s price, the monthly payment would have been more than twice the minimum wage and more than average earnings (Figure 4). With the euro, rates fell to 3 to 5 per cent, and the payment fell to about 70 per cent of the minimum wage in the mid-2000s. It reached its lowest, about 45 per cent of the minimum wage and a fifth of average earnings, between 2013 and 2021, when prices were low and then rates near zero. By 2025, with prices at a record and rates around 3 per cent, it was back to 68 per cent of the minimum wage and 36 per cent of average earnings.[8][9]
So the home is the item that the basket’s arithmetic gets most wrong, in both directions. Against wages, a home is no dearer to buy now than at the start of the 1990s, and far cheaper to finance. But it is twice as dear as a decade ago, the finance has become dearer again, and the young, who buy at today’s price and not the average of thirty-seven years, meet the peak and not the average. That is the subject of The Rent.
The life of 1980, today
Measured in hours of work, the Portuguese of 2025 can buy the life of 1980 for about half the time it took then, and at the minimum wage for about fifteen hours a week a person. Most of the gain came from goods; almost none from services, and none from the things the State or tobacco taxes price. Portugal took almost all of its gain as more consumption, two and a half times as much a head, and very little as time: the normal working week fell from about 45 hours to 40, and the Portuguese still work among the longest hours in western Europe.
The exercise has limits that should be stated. The 1980/81 survey covers only the mainland, and counts home-grown food at market prices. For a few categories the price index before 1988 has to be approximated. The index adjusts for quality, so a television of 2025 counts as cheaper than it would if it were compared with the set of 1980 as an object. The hours are a convention: a 45-hour week in 1980 and a 40-hour week now, with 14 monthly payments. And the home, the largest item in any modern budget, is measured badly by any price index and has to be looked at separately. None of these changes the shape of the answer: the goods of 1980 have become cheap in hours of work; the home, the table in a restaurant and the classroom have not.
This piece was written collaboratively with Claude Opus 5.5 (Anthropic): human specification, editorial direction and critical review; machine data research, analysis and drafting. The 1980/81 household budget was read from INE’s scanned report (Table 3.A) and repriced line by line with INE’s consumer price index by category, back-cast by INE to 1948; where the detailed index begins only in 1988, the years 1980–1988 use a broader index. The survey period is taken as ten months of 1980 and two of 1981. Hours of work use the minimum wage by month from DGERT’s table of legal diplomas and average compensation per employee from AMECO, with 45-hour weeks around 1980 and 40 today, and 14 payments a year. The house price per m² before 2011 is estimated from the OECD index and INE’s 2015 median valuation. The computations are in scripts/basket.py and the research notes; results are in docs/basket-results.json and the figures in docs/basket-figures.html.
The cover photograph is Oporto: Mercado do Bolhão by Jorge Franganillo; CC BY 2.0, via Wikimedia Commons, cropped.
Authored by: Luis Matos Ferreira — Physicist, Developer, Writer
- The Fifteen-Hour Week — Keynes’s prediction, and the American basket of 1977 in hours of work.
- The Two-Thirds Country — Portugal’s productivity, hours and wages.
- Where the Hours Went — what the extra income bought.
- The Rent — housing and the young in Portugal.
- INE, Inquérito às Receitas e Despesas Familiares 1980/81, Continente, Table 3.A (p. 82), average annual expenditure per household by item.
- INE, Inquérito às Despesas das Famílias 2022/23, and comparable division shares 2000–2022/23.
- INE, consumer price index by COICOP category, base 2025, back-cast to 1948 (indicator 0014641); Banco de Portugal BPstat, CPI series; author’s line-by-line repricing of the 1980/81 basket.
- AMECO, spring 2026: private final consumption per head at constant prices, Portugal, 1980–2025.
- DGERT, Evolução da Retribuição Mínima Mensal Garantida, updated 26 May 2026, with the legal diploma of each change (Decreto-Lei n.º 480/80 to Decreto-Lei n.º 139/2025); GEP, Salário mínimo nacional: 45 anos depois, 2019; Decreto-Lei n.º 409/71, Lei n.º 2/91 and Lei n.º 21/96 on working hours.
- AMECO, spring 2026: compensation per employee and national consumer price index, Portugal.
- OECD, analytical house price database: nominal house prices (from 1988) and rent index, Portugal.
- INE, median value of bank valuations for housing, 2011–2026; PORDATA and GEP, Quadros de Pessoal, average monthly earnings 1985–2024; author’s calculation.
- Banco de Portugal and INE, Séries Longas para a Economia Portuguesa, 2020, Tables 5.6 and 5.7 (interest rates); European Central Bank, MFI interest rate statistics, Portugal, new loans for house purchase, 2003–2026.
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