Legal minimum wage: is it necessary ?, is it feasible?
Discussing the introduction of the legal minimum wage in Italy requires answering two questions: first, is it necessary? Second: is it feasible? Claudio Negro's analysis of the Kuliscioff Foundation
Discussing the introduction of the legal minimum wage in Italy requires answering two questions: first, is it necessary? Second: is it feasible?
As for the first, it should be pointed out that the vulgate for which the minimum wage is determined by national collective bargaining, net of legal and political assessments, has visible flaws: not only workers who are not formally subordinate are excluded (VAT and economically dependent collaborations , workers activated on IT platforms) but also (obviously apart from undeclared work) workers attributable to formally correct collective agreements but known as "pirates". The Cnel, in fact, admitted and not granted that the contracts not signed by the traditional trade unions are "anomalous" tells us that only 33% of the existing contracts are signed by the CGIL and / or CISL and / or UIL. Confindustria for its part signs only 14% of the contracts in force. In the trade sector, for example, there are 192 contracts in force, of which only 23 are signed by Cgil, Cisl, Uil. If these contracts exist it is evidently because they have advantages over the "classic" national collective labor agreements; hardly any benefits to employees. It is difficult to determine the number of workers to whom these treatments are applied (the estimates speak of 5 million), which however on average provide for minimum table numbers 7% lower than those of the CCNL Cgil Cisl Uil and very often one month less.
A more precise figure comes from the INPS : the average minimum gross hourly wage provided by the "regular" national collective labor agreements was € 9.41 in 2015 (including thirteenth) but in 2017 as many as 22% of workers received less than € 9, with peaks notable among women, young people and regions of the South. It is interesting to note that the minimum "median" hourly wage, that is the one that is halfway between the minimum and maximum value, is € 11.77: the minimum average wage is therefore equal to 80% of the median. In France it is 70% and in Germany 50%, which shows that the legal wage curve (i.e. net of undeclared work) in Italy is very flattened, as well as presenting rather low absolute values: in 2018 an average € 20, against 23 of the Euro area and 21 of the EU.
To identify an acceptable value of the minimum average hourly wage, it may be useful to refer to the situation in Germany and France, the two countries most similar to ours in terms of market size and production structure. In 2017, the minimum gross hourly wage in Germany was € 8.50, representing 54% of the current median monthly wage (€ 2,719). In France it is € 9.61, and the minimum wage represents 70% of the average (€ 2356). In Italy, the median hourly wage is € 11.37 and the average wage € 2033.
If we were to take the data from Germany as a reference, and therefore aim for a legal wage covering 54% of the average wage, we would have to guarantee a minimum hourly rate of € 6.35, which generates a monthly wage of € 1,098 gross.
If we take France as a reference, the minimum hourly rate represents 70% of the average wage: we should establish an hourly minimum of € 8.22, which generates a monthly minimum of € 1423. This minimum level would lead to an increase for about 15% of employees, and would roughly coincide with the “minimum” tabular minimums of the less “rich” CCNLs (eg transport and logistics). If we want to reason about the usefulness of such a provision, it is necessary to refer above all to the possibility that the minimum wage by law does not only define the minimum hours for standard employees, but also the minimums for those who are paid by the piece or by delivery, inspired by the method proposed by the Low Pay Commission in the UK. However, even for standard employees, in addition to the 15% which is below the minimum hypothesized, positive effects are foreseeable: a "wave" effect on the rest of the distribution to maintain a minimum of differential between workers with different roles and skills, so that even wages above the minimum tend to rise is known to economists.
A hypothesis that so far we have not seen emerging in the Italian debate is that of increasing the value of minimum wages by using targeted reductions in income taxes or employee social contributions for low-income workers. In this way, the increase in the minimums would not create a worsening of the accounts for companies, but would transfer the burdens on public spending; however, it is not a very different or much more expensive solution than the measures, in part already in place and / or envisaged by the Budget Law, to encourage the hiring of various types of workers.
However, it can be objected that the introduction of a mandatory minimum, all the more so close to the median value as it would be by setting it, as mentioned above, at € 8.22, would help to align more than the different CCNLs of Category and contractual wages in the various areas of the country. Especially for this second aspect, the introduction of a legal minimum wage would have the effect of strengthening the imbalances already present between the nominal value of the salary and the real purchasing power in the various areas of the country: as Pietro Ichino observes in Italy the power of wage purchase is higher in regions where productivity is lower, and vice versa, while in Germany the relationship between purchasing power and productivity is direct, rather than inverse. The answers to these problems can only be two: either establish minimums differentiated by territory and possibly by productive sector, or introduce a minimum correlated to the maximum ratio between purchasing power and nominal wages, which would bring the minimum to a significantly lower level. to the 8.22 € previously hypothesized, with the probable side effect of encouraging collective bargaining linked to productivity, but would not produce positive effects for very low wages, that is, for those who should be the beneficiaries of the legal minimum wage.
Even more difficult, and we come to the second question, to overcome is the obstacle of an institutional and political nature that is posed above all, but not exclusively, by the trade unions, which fear a weakening of the negotiating power and a migration of companies from the National Collective Labor Agreement to wages. legal minimum. A legitimate concern, but one that is not reflected in the events of other European states with strong unionization where the legal minimum has been introduced, primarily Germany. Andrea Garnero shows how the minimum wage is rather a result of the weakening of collective bargaining and not the cause: the growing number of so-called pirate contracts and the significant number of workers paid less than the contractual minimums seen before actually raise doubts about the capacity of the system of Italian collective bargaining to protect weaker workers and defend companies from unscrupulous competitors.
Moreover, for over 70 years the Italian trade union has benefited partially from a situation of ambiguity regarding its nature and role within the economic system; CGIL CISL and UIL, heirs of the Single Union established by the CLN, have unquestionably and with the exception of some particular situations had the quasi-monopoly of union representation, institutionalized by Law 300 with the formula of "comparatively more representative trade unions". A formula that no longer holds and requires a more transparent verification, as has already been accepted in principle by the main trade union and employer organizations, without which there is no legitimate possibility of conferring erga omnes value on any collective agreement; nor, on the other hand, can the consolidated jurisprudence still offer lasting guarantees, according to which the "fair remuneration" provided for by the Constitution is identified in the minimum tables set by the CCNL signed by the "most representative trade unions": it happens that an agreement is signed only by one or two out of three unions, and even more frequently it happens that the underpaid employee (not to mention the economically dependent self-employed person) does not have the courage, determination and strength to open a lawsuit whose outcome is quite probable but not certain , while the violation of a legal obligation (the legal minimum wage) could also be sanctioned by the Labor Inspectorate and with certain results.
The solution to the problem is theoretically very simple: the implementation of article 39 of the Constitution which, in affirming that the trade union association is free and therefore the establishment of a trade union is a right available to all, also indicates the rule that from the plurality of Trade Union Associations can lead to the uniqueness of the National Collective Agreement: that for which this right belongs to the trade union coalition formed by legally constituted and registered organizations that represent the majority of the workers involved in the Agreement. The count of the members and also that of the trade union representatives in the company is not complicated: there are already general agreements with the INPS. In fact, the principle is already applied in company bargaining, where the effectiveness of the agreement is sanctioned by a majority vote by the Unitary Trade Union Representatives or by a referendum of all workers. The insurmountable obstacle is represented by the obligation of registration, which would imply the constitution of the Unions in Legal Figures: a hypothesis that, either to reaffirm the break with fascist syndicalism (which was framed as an articulation of the totalitarian state), or to the wink to the class character and therefore extraneous to the bourgeois institutions of the "historical" trade unions, (or for more venal reasons linked to fiscal obligations and legal responsibilities) cease to be CGIL CISL UIL have always refused.
There is of course the possibility of changing the Constitutional Charter (but wasn't it the most beautiful in the world?) By removing the obligation to register from Article 39. It would perhaps be a bit difficult to explain on the occasion of the inevitable confirmatory referendum that would follow … On the other hand it is hard to see another way: the erga omnes of Collective Agreements could not be undertaken without inevitable and recourse to the Constitutional Court, from equally inevitable outcome.
Ultimately the options are as follows:
To renounce to intervene on the minimums set by the various contracts, leaving market dynamics free except for the possibility of individuals to contact the Judiciary.
Establish the minimum wage by law, taking into account all the possible variables described above
Implement Article 39 in its full version, or after its amendment with Constitutional Law
It is evident that the main road is that of the implementation of Article 39, which however requires the Historical Unions to get out of an ambiguity that provides for more rights than duties, more customs than rules, more safeguards than responsibilities. On the other hand, you cannot be the custodian of a valid erga omnes right without the "omnes" binding you to some rule …
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/salario-minimo-legale-e-necessario-e-fattibile/ on Sun, 10 Jan 2021 06:19:41 +0000.