Advancing impoverishment: the fall in real wages in Italy and in Europe
There is a big problem that marks the European economy and that derives from insufficiently thought out political and economic choices: there is an evident, strong drop in real remuneration, in wages, which therefore leads to a drop in disposable income. European families are increasingly poor, and Italian ones are even worse off than the average.
This is what the OECD, the economic organization of advanced countries, tells us in its statistical bulletin on growth and well-being . From this document we begin to consider the most interesting data, starting with the disposable income for households. Let's start by evaluating the changes in real household income and per capita GDP in 2022, as per the May bulletin.
Italy, in real terms, seems to be defending itself in terms of GDP, which is increasing, but is doing badly in terms of family income. The former increases, but the latter decreases. We recall that the Italian population fell by 2.9% in 2022, therefore the merit of the growth in per capita GDP is more due to demographics than to real growth. In short, however, the data is not positive, also because the possibility of long-term growth of GDP on a demographic basis is lost.
The situation then precipitated in the last part of 2022, i.e. in the transition from the third to the fourth quarter, as we can see from the following graph.
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Italian household income shrank by 3.5%, the biggest result in the G7. Per capita GDP also fell, albeit very little, and in this the value was lower than in other countries such as Germany and Canada. In short, our 2022 ended very badly, and this does not bode well for 2023.
So let's see the situation of real wages, also quite dramatic. We take this data from the June 2023 outlook
Italy has seen a drop in its real remuneration, this drop of 4.39% between the second half of 2021 and the second half of 2022. A sharp drop, over a year, which places us in the second half of the ranking of losses. South Korea has seen an improvement in compensation. Canada and Portugal see minimal declines, even hyper-indebted Japan sees a decline in wages that is less than half of ours. Sure, we're doing better than the Baltic countries or Czechia, we're aligned with the Netherlands and Germany, but there's no reason to be particularly happy about it.
We have an income problem that needs to be solved with lower taxation and an increase in the demand for labour, to be achieved, however, with intelligent policies, perhaps a little different from those imposed by the PNRR. Someone will have to think about it, otherwise the road to impoverishment will become irreversible. Something must be done, something should be done, perhaps breaking with the patterns of the past.
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The article The impoverishment that advances: the fall of real wages in Italy and in Europe comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/limpoverimento-che-avanza-la-caduta-dei-salari-reali-in-italia-e-in-europa/ on Mon, 12 Jun 2023 17:24:06 +0000.