Why Employment Rose When Pay Fell

For Portuguese pharmacists, the employment puzzle is a stock-and-flow problem: how could the number working in community pharmacies keep rising after wages and value added fell? This chapter uses that distinction to separate aggregate employment from individual job security. The answer supported by the evidence is not that pharmacists were immobile or that layoffs disappeared. It is that a continuing inflow of qualified workers, combined with limited comparable alternatives and job churn, was large enough to expand the workforce even while the wage offered to new entrants moved down.

That distinction changes what “resilience” means. A growing employment count can show that pharmacies still needed pharmacist labor, but it cannot show that each worker kept the same employer, that every open position was a good job, or that the occupation retained its earlier economic value. To read the Portuguese result accurately, start with the arithmetic of a workforce and then ask what kinds of transitions produced it.

A workforce is a stock fed by flows

The employment stock is the number of pharmacists working in community pharmacies at a given time. It changes through flows: newly qualified people enter, existing workers move between employers, some leave the sector, and firms create, eliminate, or relocate positions. In its simplest form, the next stock equals the current stock plus entrants minus exits. That identity is basic, but it prevents a common mistake. A rising stock tells us that entries exceeded exits; it does not tell us that exits were zero or that the people entering were receiving the same terms as the people already there.

The Portuguese data show a rising stock alongside lower pay. Employment of pharmacists in community pharmacies grew at close to 3 percent per year after 2009. Over the longer comparison used by the study, retail-pharmacy pharmacist employment grew about 4 percent per year from 2005 to 2018 and was at least 35 percent higher in 2022 than in 2009. At the same time, the value created per pharmacist and the average wage fell. The employment result is therefore not a contradiction once the workforce is treated as a moving population rather than a fixed group of people.

The size of the inflow helps explain the timing. Portugal’s number of new pharmacy graduates rose from about 530 per year in 2005–2007 to just over 800 in 2008 and remained high through 2014. In the years after the lower wage tier appeared, new graduate inflows accounted for roughly 5–6 percent annual increases in the workforce from 2012 to 2016. Job churn contributed another 5–6 percent per year. These figures describe the scale of movement into new jobs and between employers; they do not mean that every percentage point became net growth. They show, however, that the sector was processing a large number of entries and transitions while its average wage was being reset.