What the latest Istat data really say about the decline in employment
Lights and shadows of the most recent Istat data on employment. The analysis by Claudio Negro of the Anna Kuliscioff Foundation
Istat data on employment in January confirm a slight downward trend that had already manifested itself in December 2023: employed people decreased by 34,000 units, mainly due to the decline in self-employed workers (minus 24,000).
However, it is interesting to note the dynamics that in the group of employees have led to a decrease, to tell the truth very slight (10,000 units) in employment. First of all, it is the effect of the combination between an increase in workers with permanent contracts (+5,000) and those with fixed-term contracts (-15,000). Positive news on the one hand, because it confirms a trend that has been underway for many months towards the stabilization of employment (despite the jeremiads of Landini and his allies), but at the same time it is a sign of the fact that the economy is also stabilising, but consequently it tends to no longer grow, or in any case much less than before.
Another observation on the merits is that companies are concerned about retaining employees for at least two reasons (not necessarily inseparable): the difficulty in finding suitable professional profiles (not necessarily very high, but competent) as the Excelsior Unioncamere Observatory certifies every month which reports a constant mismatch between job supply and demand which is around 50%. Secondly, the need for workforce inputs that companies need to overcome poor innovation and low productivity, especially in the tertiary sector.
Paradoxically we are faced with an economy which, with the exception of some manufacturing sectors, creates employment, albeit modestly paid, as a remedy for productivity that is not growing. Which gives us a glimpse of a complicated future in which we will have to decide whether we want to compete on the ground of innovation or on that of low labor costs; or perhaps if we will have a country split in two between those who compete with the industrial West and those with developing countries.
However, there are other aspects of these dynamics that are worth examining further: the first is that employment grows among the older segments of the population (over 35) and declines among the younger ones (under 35). This is largely an optical effect due to the aging of the population, but the decline in employment in the younger segment is a very bad sign after more than a year of not sensational but continuous growth (the trend balance, i.e. on an annual basis, is in fact still positive).
A comforting note: female employment continues to grow: +15,000 and +1.9% trend, well above the 1.3% for men.
Unfortunately we do not yet have the data to know how much of this employment is part time, a bug that often (especially in the case of involuntary part time) downgrades female employment.
The dynamics that lead to the definition of the unemployment rate must be carefully evaluated, which remained stable at 7.2% in January. Many things are moving around it: unemployment increases among women and the population over 50, but this figure is motivated by the fact that the activity rate is growing in these groups, therefore more people are looking for work. But in general the inactivity rate (those not working and not looking for work) increased by 0.2 points, confirming a trend which, albeit with modest figures, has been active for a few months. Which illustrates, like the other data considered above, a decline in labor market activity.
In summary, I believe we can take note that the sensational post-covid recovery in production and employment is over and leaves us dealing with a job market marked by four serious problems: an inability to match job supply and demand, both strong but not communicating; a production system largely based on labor intensity and therefore low wages; a total absence of active labor policies, capable of promoting the meeting of supply and demand and transitions in the labor market; a constant aging of the workforce and insufficient generational turnover.
Problems that are obviously not up to Istat to resolve, but to politics, trade unions and business organisations. But hurry a little, before this situation of substantial adjustment becomes stagnation…
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/dati-istat-occupazione-gennaio-2024/ on Sun, 03 Mar 2024 08:00:30 +0000.