Illegal migrant workforce set to grow, warns Migration Observatory boss

Portugal is at risk of creating a growing underground workforce as tighter immigration and nationality laws push more foreign workers into irregular employment, according to the head of the country’s Migration Observatory.

In an interview with Expresso, Pedro Góis, director of the Migration Observatory, warned that recent policy changes are driving many migrants out of the formal labour market, despite continued demand from employers.

“The number of illegal immigrants is going to increase,” he said, arguing that the mismatch between labour shortages and increasingly restrictive migration pathways is fuelling the expansion of the informal economy.

His comments follow new figures showing that Portugal’s Social Security system recorded the cessation of activity of 162,000 immigrant workers last year – a 66% increase compared with 2024.

Góis described the figure as “extremely high” and said it should prompt an urgent meeting of Portugal’s Social Concertation Council to understand what is happening.

While some migrants have left Portugal—many for other European countries after the abolition of the “manifestation of interest” residency pathway—he believes that does not explain the scale of the decline.

“If there had been an exodus of this magnitude, we would already be feeling much greater labour shortages,” he explained.

Instead, he argues many foreign workers remain in Portugal but have shifted from the formal economy into undeclared work – particularly in sectors such as construction and agriculture.

Some, he said, may have concluded that recent changes to Portugal’s nationality law have made citizenship unattainable, removing an important incentive to continue paying Social Security contributions and taxes.

Others have fallen into irregular status after residency applications have been rejected or permits not renewed, but have remained in Portugal working without legal documentation, he believes.

To make matters even more complicated, Góis maintains that enforcement against illegal employment remains limited.

“The probability of being detected is very low,” he told Expresso: workplace inspections are infrequent; the informal labour market is subject to “insufficient scrutiny”.

Thus, under current policies, he expects the number of undocumented workers to continue rising.

“We are creating an informal workforce because there is no correspondence between the needs of the labour market and the increasingly limited legal routes for migration,” he said. “It is a step backwards.”

The most recent data has shown that new migrant registrations with Social Security still outnumber departures, but Góis believes the gap is narrowing rapidly.

He expects Portugal’s net migration balance to become “residual” during 2026, and eventually turn negative unless new legal migration channels are expanded.

“If we block every point of entry, that is naturally what will happen, and it will be dramatic,” he warns.

Portugal’s ageing population means immigration remains essential to sustaining the country’s economy and public services.

“We cannot afford to lose the people we already have, because that puts the functioning of society itself at risk,” he said, pointing to Japan as an example of the long-term consequences of demographic decline – noting shortages of carers for the elderly/ infirm, retail staff and other essential workers, despite the country’s greater capacity for automation.

Góis also contrasted Portugal’s increasingly restrictive migration policies with neighbouring Spain, where recent measures to regularise large numbers of migrants are expected to bolster the labour force.

Portugal is currently sending contradictory signals to prospective migrants, he stresses.

“The labour market tells them ‘come’, because it needs them – but migration policies are sending the opposite message,” he said.

Acknowledging that migration must be managed, Góis argues that governance should focus on creating effective legal pathways rather than closing the door.

“Managing migration is not about shutting the door. It is about creating mechanisms for regulated migration, and the existing measures fall well short of what Portugal needs,” he emphasises.

Source: Expresso