Here are the truths and lies about the occupation in Italy
What really happens to the Italian job market. Claudio Negro's analysis of the Kuliscioff Foundation
Some recent assessments incorporate a strong dose of skepticism towards the real consistency and quality of the economic recovery, which focuses not so much on macroeconomic indicators as on the issues of employment and wages. However, it is mainly a position conditioned by imprecision, incorrect evaluation of the data and their relationships, uncritical adherence to commonplaces.
The publication of the ISTAT reports on the labor market in the third quarter and in the month of October, and that of the Bank of Italy on mandatory communications for the same period can help to shed some light.
First of all, employment rises, but this is well known and overt: a long-established trend, even if around 200,000 employees are still missing to reach pre-covid levels. That this is not an occasional rebound is shown by the trend figure (+ 2.2% on the third quarter of 2020) and the labor input figure in the economic system, measured by the number of hours worked (+ 4.1% compared to 2020, and + 1.4% compared to the previous quarter). The figure for employee jobs is also eloquent, growing by 2.7% compared to the previous quarter, and even by 3.3% in industry and 5.8% in services compared to last year. Where a bit of clarity needs to be done is on the variants of dependent employment.
First commonplace: it is an occupation made of precariousness. Not true: it is an optical effect. It is very true that now the fixed-term hires exceed those of indefinite duration, but for an obvious reason: during the crisis and the freezing of layoffs the only terminations of work (apart from voluntary resignations or retirement) were those of fixed times that expired. It is natural that as soon as the economic trends have advised to readjust the workforce, the companies have begun to fill the classic reservoir of forward contracts. It is not at all true that fixed-term contracts have increased in absolute terms: now they are 13% of employees, exactly as before the crisis. Considerable, as usual in periods of growth, the very significant increase in temporary work: + 30% compared to 12 months ago; it should be remembered that 80% of the temporary contracts are fixed term (they represent about 16% of all the temporary contracts) but 100,000 temporary workers are permanent. Ultimately, the cliché that the so-called precariousness increases with the recovery is completely unfounded. There would then be a serious reflection on the equation temporary work = precariousness. We will do it!
Second commonplace: it is an occupation in which part-time work has a huge weight. Wrong! In the recovery, part-time hires grow significantly less: in the last 12 months, full-time positions have grown by 5.6%, part-time ones by 3.6%. The incidence of part timers on the total of permanent employees is 11.2, half a point lower than 12 months ago. On the other hand, a lower incidence of part-time work, albeit marginal but significant because it is a tendency, can be seen from the figure of hours worked per capita, which grows by 3.3% in economic terms (month on month) and by 2.7% on a trend basis ( last 12 months). A serious survey on "involuntary" part-time still remains to be done: for Eurostat the definition applies to workers who would like to switch to full time, and according to this definition in Italy 15% of part-time employees are in this condition; Italian researchers, on the other hand, tend to adopt criteria that consider whether part-time work was a request from the worker or a proposal from the company, and in this case the involuntary ones arrive at around 40%.
Myth 3: wages decrease. It is not so! Of course, the wage bill fell in 2020, as the number of employees decreased. As in the months of the lockdown and immediately following, the average wages fell, but only as a result of the redundancy fund. Conversely, starting from 2008 and up to 2019, Eurostat informs us that average gross salaries have grown by about 3%, in line with the EU average. The situation is different if we take into account the net wages and the different income brackets: for the one on € 16,000 per year the net increased by 7.4 points (thanks above all to the "Renzi bonus"), for that between 50,000 and 55,000 it is decreased by 3 points, but this group of workers, as we have learned from the recent debate, is not particularly close to the heart of the union! (NB the data refer to a single income without children, therefore they exclude deductions and benefits that are more relevant in the low income brackets).
Of course, speaking of wage trends, it is necessary to take into account the real value, therefore the purchasing power. According to Job Pricing, the 2014-2019 period saw global wages actually grow significantly more than inflation: between 5% of middle managers and 8% of blue-collar workers; however, this favorable trend was related to minimal, if not negative, inflation which rose sharply in the second half of 2021. At the end of the third quarter (ISTAT data) wages had actually increased by 1.7% but inflation of 2.6. For 2022, however, 80% of workers are covered by a renewed national collective bargaining agreement which provides for wage increases on average of 1.2%.
This indicates quite clearly what the point on the wage issue is: wages are low, and only hold up as long as the price index is also low; it is clear that the trade union cannot think of increasing wages by operating only on tax and contribution relief, however important the wedge may be (which, moreover, has negative effects on labor costs more than on net remuneration). It would be useful to make a serious comparison between Italian de facto and European wages, also considering institutions such as the thirteenth, fourteenth, severance pay and the income support system financed by businesses and workers. However, there is no doubt that Italian wages are at the low end of the EU: after all, factor productivity, including labor, is among the lowest in Europe.
The game of wages is at stake on this terrain, as long as the trade union is able to combine wage claims with agreements on other factors that affect productivity: opening to competition and the end of monopoly in public services, revision of authorization-control systems on initiatives private and public entrepreneurial systems, reform of the criminal and civil judicial system and review of administrative justice competences, profound renewal of the Public Administration from the methods of recruiting personnel to the redefinition of its mission towards society. but which at the moment, with the Recovery Plan to be articulated and implemented, represent an unmissable opportunity for a trade union that wants to include the issue of wages in a reorganization project of the country system.
One last aspect of the recent reports on which the Trade Union has not yet dealt with an organic reflection: ISTAT tells us that the vacancy rate (scheduled hires that remain unfulfilled due to lack of suitable candidates) is 2% in the third quarter, doubled compared to last year. In other words (as has been repeatedly reported by numerous researches) the increase in demand for work in connection with the recovery does not correspond to an increase in supply. And this largely explains the difficulties in recovering pre-crisis employment, but more generally the country's endemic low employment rate. However, the union, while understandably concerned about avoiding layoffs, does not seem to give the necessary attention to promoting new employment.
But the dismissal rate of 2021 (Bank of Italy data) is even less than half of what it was at the beginning of 2019. With the end of the dismissal ban in October there was a peak (as feared) but immediately reabsorbed. The dismissals on which the attention of trade unions and the media is currently focused do not actually mark any increase compared to what is the historically consolidated trend, even if from a media point of view some episodes, especially when they see foreign investors as protagonists, have had much hype. Certainly it is not very coherent to disseminate information that emphasizes some cases, however serious they are, to fuel the belief that there is a storm of layoffs and avoid saying that overall the layoffs are not as many as feared, and that in any case they are decreasing.
Silence, on the other hand, on the problem indicated above: the lack of matching between demand and supply of work. On which, as on the prospects of young people in the labor market, only words of angry concern are spent; and when dealing with the question that could give answers to this problem, namely labor policies, the union chooses to favor a defensive line, mainly concerned with asking for social safety nets that guarantee income for the employed. A reality check and the search for constructive solutions would be useful for everyone.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-verita-e-bugie-occupazione-in-italia/ on Sun, 26 Dec 2021 06:49:09 +0000.