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Minimum wage by law, because the government says no

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Minimum wage by law, because the government says no

No to the minimum wage, yes to union bargaining. The government sends the reform proposals of the past legislature to the attic and extends its hand to the social partners. Facts and insights

The government has said “no” to the minimum wage . The measure, which in the last legislature saw as many as three bills, will have to be replaced by other measures , aimed at " achieving the objective of protecting workers' rights " through a series of initiatives "starting from the activation of interlocutory paths between parties not involved in collective bargaining. And this in order to understand the reasons for the non-application.

THE POINTS OF THE GOVERNMENT'S PROPOSAL

The majority motion obtained 163 votes in favour , 121 no (M5S, Pd and AVS) and 19 abstentions (the deputies of the Third Pole). The approved text sees a fundamental role played by the social partners. The government undertakes "to achieve the objective of protecting workers' rights not with the introduction of the minimum wage, but through the following initiatives:

  • activate interlocutory paths between the parties not involved in the collective bargaining , with the aim of monitoring and understanding, through the punctual analysis of the data, reasons and causes of the non-application;
  • extend the effectiveness of the comparatively more representative national collective agreements , making use of the data that emerged through the fact-finding surveys previously carried out at the national level, to the categories of workers not included in the national bargaining;
  • start a path of analysis with respect to national collective bargaining , which, especially in certain areas, involves a large number of workers, in the light of the frequent awarding of tenders which bear within them the concept of the best economic offer".

THE ROLE OF THE SOCIAL PARTIES

In the government's sights end up the " pirate contracts " to be contrasted with the broader application of collective agreements . The social partners are involved in "second-level bargaining" and in the "so-called proximity contracts", and have a particular voice in the matter for policies aimed at reducing labor costs and reducing the tax wedge, in order to relaunch the economic development of enterprises and increase employment and the purchasing power of workers.

THE THREE MINIMUM WAGE PROPOSALS OF THE PAST LEGISLATURE

The first of the three bills of the past legislature were the DDL n. 658 of 2018 of the former labor minister Nunzia Catalfo, which established that the hourly wage should not be "less than nine euros per hour gross of social security contributions". The second, the DDL 310/2018 , whose first signatory is Senator Laus , set the minimum hourly wage at 9 euros but provided for a relatively modest contribution from the trade unions. Finally, the DDL n. 1135/2019 (DDL Nannicini) provided for a guarantee salary established by a specific Commission for the areas of activity not covered by collective agreements.

THE EUROPEAN COMMISSION DIRECTIVE ON THE MINIMUM WAGE

A proposal for a directive relating to the minimum wage in the European Union (COM(2020)682 final) has been in the lurch for two years. Although it is not aimed at introducing a legal minimum treatment, it wants to promote adequate levels of wages for workers in the European Union . The number of the working poor, people who, despite working, are unable to have a dignified and poverty-free standard of living, has increased significantly in the EU, especially after the Covid19 pandemic. This is supported by the research by AdapT (Association for International and Comparative Studies on Labor Law and Industrial Relations) “ A law on the minimum wage for Italy? – Reflections and analysis after the European directive ”.

REDUCE POOR WORK

The Commission's intervention aimed at “establishing a framework aimed at improving the protection of the wages of citizens of the Member States of the Union , while respecting their national traditions and competences”. It should be emphasized that in any case the Member States remain free to "use the method of setting wages that they deem most functional in order to guarantee adequate levels of remuneration for their citizens". These frameworks change according to whether or not countries have minimum wage legislation. Therefore the decision of the Meloni Government does not conflict with the proposal for a directive COM(2020)682 final.

MINIMUM WAGE: THE RISK OF ILLEGAL WORK

The European Commission 's impact study on the proposed Minimum Wage Directive has highlighted that both in countries with a statutory minimum wage and in those with a contractual minimum wage, there is widespread non-compliance with minimum wages. Why do employers pay workers below the minimum wages? Both, according to the AdapT study, due to choices of an opportunistic nature, and due to the levels at which minimum wages are set . In fact, “when the level of the minimum wage exceeds firms' ability to pay , default is likely to become inevitable”. A too high level of the minimum wage therefore translates, on the one hand, into a non-application of the minimum wages, and on the other into recourse to undeclared work, with negative repercussions for workers and public finances.

LABOR COSTS AND LOW PRODUCTIVITY THE CAUSES OF LOW WAGES

So the AdapT pamphlet pinpoints the causes of low wages in labor costs and low productivity. Labor costs are negatively affected by the presence of “ irregular work and low employment rates ” which determine “the high tax and social security component which weighs on wages”. Among other things, employees are not the only ones at risk of falling into the working poor category: trainees, self-employed collaborators, occasional workers, illegal workers and VAT-registered freelancers. All professional categories excluded from the minimum wage regulations.

THE EFFECTIVENESS OF INDUSTRIAL RELATIONS

According to AdapT analysts, the opening up of the debate on the minimum wage at a community level raises a very important political issue: the rethinking (and perhaps overcoming) of industrial relations . The doubt, which also seems to emerge from the debate around the minimum wage, is that the "representation and negotiation" method is no longer considered sufficiently effective in determining the economic market value of trades in the various productive sectors. It would be representation that would be affected "and it is perhaps not malicious to think that a part of the supporters of the legal solution basically thinks that representation itself, inasmuch as it is free and therefore difficult to control, is an element of instability that contributes to an imperfect governance of the job market".

HOW TO SAVE COLLECTIVE BARGAINING FROM THE MINIMUM WAGE

After all, collective bargaining does not only concern economic treatment but also a whole series of institutions other than wages . And the Government is well aware of this, having chosen to place the role of the social partners at the center of its proposal. The solution to preserve collective bargaining, and therefore of the social partners, would be, according to the study, to "give life to a bargaining that finally opens up at any level deemed appropriate (national, territorial and corporate) to an economic measurement of the value of work centered on professionalism and skills and no longer simply on the hour-work as happened in the last century”.

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-per-legge-perche-il-governo-dice-no/ on Thu, 01 Dec 2022 14:50:44 +0000.