Let me explain what is wrong with the government measures at work

Let me explain what is wrong with the government measures at work

The article by Natale Forlani, former national leader of the CISL

For labor policies, the new Budget Law proceeds in full coherence with the implementation of the interventions implemented in 2020 to counter the economic effects of the health emergency: refinancing of the supplementary funds and those in derogation with the cause of Covid, extension of the freeze on dismissals, tax relief for new permanent hires and for all companies operating in the South, confirmation of a series of measures such as the reduction of the tax wedge on wages up to 40 thousand euros per year, accompanying measures for early pensions for unemployed elderly workers and for those provided for in company contracts in medium-sized companies aimed at managing redundancies or promoting generational turnover.

The numbers change, in relation to the new intervention needs, but the philosophy is the same: proceed on sight to pragmatically contain the social impact of the crisis, in perfect coherence with what is being done for the aid package for businesses , waiting for better deadlines on the spread of anti-Covid vaccines, and on the release of the European resources of the Recovery fund.

Specifically, the 2021 Budget Law proposes the extension of the freeze on layoffs until March 31, with the exception of companies that are closed, with bankruptcy procedures or that have signed trade union agreements for the management of redundancies, and the provision of an additional 12 weeks of the Cig ordinary until the same date (extended to 30 June for the non-statutory funds). For companies that do not use the supplementary funds, there is the possibility of not complying with the payment of social security contributions for 8 weeks.

For companies hiring young people up to 35 years of age on an indefinite basis, social security contributions are granted for 3 years (4 years for those in the South), and a similar two-year relief is reserved throughout the country for companies. who hire unemployed women, increasing the number of employees in charge compared to the previous year. Pending the definition of the agreement with the European Authorities for tax relief for all employees in companies operating in the South, which, according to the Government's intentions, should last for ten years (for a total cost of over 30 billion to be financed with the resources of the Recovery fund), the Budget Law is limited to extending those already arranged for the last quarter of 2020, which provide for a 30% reduction in social security contributions to be paid by employers. A loan of 500 million is also allocated to strengthen active policies, to be activated with a subsequent government measure.

As we have been able to highlight in the recent past, commenting on the similar measures adopted by the Government and Parliament in the current year, in the short term the effectiveness of this type of interventions is sufficiently proven for the part of the income support for workers, similarly to what is happening for those put in place for aid to businesses in the form of contributions on losses, moratoriums for bank debts and tax charges. But in the medium term these initiatives appear to be functional above all for enterprises with solid organizations, much less for micro enterprises very sensitive to variations in demand and for temporary and seasonal workers. Facing 2021 without an advance strategy capable of guiding entrepreneurial behavior, especially in the service sectors which are certainly those most exposed to the consequences of the health crisis, but which also have the greatest potential for development over the next few years.

Three potential negative waves are expected in 2021: the first represented by an additional share of business closures, and a reduction in the turnover of micro enterprises and self-employed jobs, the second linked to the lack of hiring of workers, in particular temporary and seasonal workers , the third that will be related to the potential of the redundancies accumulated over the course of a year due to the blocking of layoffs.

Among these, only for the third, given the strength of the production system and the historical protections provided for workers, is one potentially equipped to withstand the impact. And it is even taken for granted that in the face of the dramatization of the problems, the strength of the representatives of the companies and workers in question will eventually play an important role in influencing the use of available resources, in terms of aid, income support and early retirement. . Thus widening the gap between protected sectors and those exposed to the consequences of economic cycles. It should not be overlooked that the budget law provides for 6.7 billion to finance the renewal of public employee contracts, among other things welcomed by the protests of the trade union organizations that consider them insufficient.

The underestimation of the seriousness of the problems, and the evident need to quickly mobilize resources in the direction of activating countercyclical and labor-intensive investments, also necessary to make sense of the continuation of measures aimed at supporting workers' income who lose their jobs or who are exposed to this risk, continues to be the big gap in our economic policies.

Article published on ilsussidiario.net

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/vi-spiego-cosa-non-va-nelle-misure-del-governo-sul-lavoro/ on Sat, 21 Nov 2020 06:05:39 +0000.