Legal minimum wage: merits (few) and defects (many)
What goes and what doesn't go with the opposition bill on the legal minimum wage. Giuliano Cazzola's analysis
The legal minimum wage has exploded. Despite some marginal controversy between the protagonists, an agreement has been found (to take the joint press conference as a good thing) between the oppositions, who will present a draft law (PDL) on the matter to the Chamber signed by the exponents of the Democratic Party, M5S, Sinistra and Verdi, Action. Only Italia Viva has kept its distance. As far as the contents are concerned, we can trust a statement from Carlo Calenda which we reproduce below.
We will soon deposit, together with the other oppositions, our bill for the introduction of the legal minimum wage.
A provision that affects about 3.5 million employees and which provides for:
– A minimum wage of 9 euros per hour;
– the adaptation by the trade unions of their respective national contracts by November 2024;
– the establishment of a fund in budget law to help companies comply with the new pay levels;
– the introduction of an ad hoc commission that verifies and monitors the trend of the minimum wage.
Introducing this measure is urgent, above all because inflation has hit hard the working poor, who are increasingly in difficulty due to the rising cost of living. Moreover, with this proposal we are in line with what is already happening in other European countries (Germany, France, Spain, Great Britain…).
The minimum wage proposal sends a significant signal to workers. In Italy, those who are poor are getting poorer and this figure is growing alarmingly. Urgent action is therefore needed to solve the problem of low-paid work. It is necessary to put an end to the conditions of exploitation of which too many Italian citizens are victims.
The document contains some important omissions and questionable claims. It is not specified whether the 9 euros per hour are gross or net, a "small difference" which weighs heavily on the costs of the operation. It is not an oversight, but an ambiguity because this aspect has not been fully clarified between the various political forces in the debate. Since we are inclined to acknowledge a minimum of "logic in that madness", we take responsibility for opting for the gross solution. The table highlights how many workers would be affected under the thresholds under discussion and clarifies that the beneficiaries could be less than the 3.5 million hypothesized by Calenda.
As for the alignment with the main European countries (of which 21 out of 27 have a legal minimum wage) it is only partially true. The Directive lays down the need for decent wages, an objective that can be achieved both through collective bargaining (especially in countries which, like Italy, boast a high coverage rate), and through a specific law. Nobody seems to pay attention to a simple fact: it is very difficult to accommodate two butts in the same chair. Where a legal minimum wage is established, there is no trace or a secondary role, compared to other levels of negotiation, of the national category agreement, which instead plays a role in Italy in continuity with the corporate model. In fact, many reference audiences date back to when the category had an ontological significance and a definition of an administrative nature.
To immediately put our feet on the plate – as they say – the legal and national (as well as inter-category as far as we can understand) minimum wage has only one advantage: that of downsizing, in fact, the national contract to the point of replacing its function in the field of industrial relations. When the subject of the minimum wage was brought to the attention of the Senate in the last legislature, with the basic text of Nunzia Catalfo as president of the Labor Commission, INAPP demonstrated, during a hearing, that 9 euros represented 87% of the national median wage. It goes without saying that, with this wage base made compulsory by law, real bargaining spaces would disappear at the national level while they could only be recovered through decentralized and proximity bargaining in relation to increases in productivity (those who complain that wages in Italy are low forget to add that labor productivity has been flat for almost thirty years), moreover with the advantage of the foreseen tax benefits. Therefore, the introduction of the minimum hourly wage could reduce the role of national category bargaining, precisely because of the limited economic margins available above the amount due by law. But the INAPP data that made "the veins tremble" concerned the costs for the business system of the introduction of the minimum hourly wage (both net and gross). This would be 34 billion in favor of 52% of the employed in the hypothesis of 9 euros net compared to 4 billion in the hypothesis of 9 euros gross. In the first case, the net 9 euros (13.3) would be equal to 119% of the national median wage; while the 9 euro gross (9.7) would be limited – as already mentioned – to 87%.
How could companies shoulder such a burden by law? Goodness of the opposition front, collective agreements would have more than a year (November 2024) to adapt and could count on a fund allocated in the budget law that helps them "to comply with the new wage levels". Another case of that "nationalization" of wages which is the new frontier of Italian-style socialism. By now the State has taken care of it: it provides incentives for companies to hire; tax an increasing share of social security contributions to reduce the "wedge" in favor of workers; pays the inclusion allowance. Not to mention subsidies, aid and refreshments (by the way: it's not true that poverty has increased). The doubt arises that the last part of the post was suggested by Maurizio Landini, given that the approach is his. If the legal minimum wage is also added, public policies will take over bargaining and condition its direction and obligations. Then there is another not insignificant problem. The new allies of the smig have realized that, in times when inflation has once again become a threat, with their pdl they would introduce another escalator, included and incorporated into the whole of remuneration whose periodic variations would be entrusted to a special commission?
In essence, even contract renewals would become the subject of an external operation conditioned by political pressure. It would be much easier for unions to submit their demands to the political body that monitors the minimum wage, rather than engaging in negotiations with their counterparts. The members of the commission send the bill to the State; entrepreneurs at the shareholders' meeting. It is easy to understand that, if 3/5 of the salary will be defined by public procedures, sooner or later industrial relations will also be regulated by an algorithm.
Article published on Bollettinoadapt.it
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-pregi-pochi-e-difetti-tanti/ on Sat, 08 Jul 2023 05:36:17 +0000.