One of the post-crisis aspects is the disconnection between productivity and wages, which are lagging behind. The chief economist of the OECD said so Catherine Mann on 18 March 2015 at the presentation of theInterim Assessment, noting that the increase in wages remains well below the increase marked by productivity. This is not the case in Italy, where both wages and productivity are declining. Let's take a closer look at the situation and its causes.
Productivity and real wages: a comparison between Italy and OECD countries
Consider an important measure of productivity: GDP per hour worked, also known as labor productivity. The data of Global Wage Report 2014-2015 of the ILO (International Labor Organization) clearly show that in developed countries the gap between labor productivity and real wages (ie wages adjusted for inflation, so as to take into account their purchasing power) is widening.
In Italy, on the other hand, we see a generalized cut rather than a gap: between 2007 and 2013 labor productivity fell by 0,14% (source: OECD), while the real wage index fell to 94,3 points in 2013, from the 100-point base for 2007 (source: ILO Global Wage Report 2014-2015).
Why did real wages fall in Italy?
Economic research has shown that real wages are pro-cyclicali.e. they follow the economic cycle. This explains their decline with the worsening of the Italian economic situation. Added to this is the age-old problem of the tax wedge, which however rose between 2000 and 2012. Italy is in sixth place among the OECD countries for the weight of the tax on the salary, with a taxation that "eats" 47,6, 38,3% of the gross salary of a single child without children. The situation of workers with dependent families (wife and two children) improves slightly compared to singles, with a tax wedge of 2012% (source: OECD, data updated to XNUMX).
We must not underestimate then that wages and productivity influence each other. Look at the graph: it shows a direct correlation between wages and productivity in developed countries, whereby if one increases, the other increases and vice versa (source: ILO, data for 1999-2013).
A correlation by definition does not imply a causal relationship, however studies of organizational behavior teach that salary affects both commitment to work and performance, albeit in a way mediated by passion for what one does (technically: motivation inherent). Therefore, low real wages have a negative impact on the "will to work".
The causes of low labor productivity in Italy
1. Low investment and innovation
The study center Impresa Lavoro, on the basis of Istat data, notes that since 1980 investments have fallen slowly but inexorably: the stock of gross capital has gone from 3% to less than 1%.
The low level of investments translates into a low level of innovation: we are 18th out of 28 in Europe for Research and Development (R&D) expenses, half covered by the State and the other half by companies (source: Eurostat). The low level of innovation and investments are both daughters of the absence of an industrial policy which, in turn, has brought with it a progressive drop in demand, especially with the crisis.
2. Poor management of resources
Economists Ottaviano and Hassan argue that Italy misuses its resources, both human and economic: between 1995 and 2006 it invested more in sectors with lower productivity.
These wrong choices are in turn the result of low ICT investments and poor personnel management. Specifically, in Italy:
- le promotions they do not take place on the basis of merit, but of seniority;
- i employee awards they are not linked either to performance or to the achievement of corporate objectives;
- workers less capable they are hardly removed from their position;
- cadres and managers do not see the attraction and development of young talents as a priority.
3. Inefficient labor market
Finally, the economists Thomas Manfredi and Paolo Manasse investigated the problem of the incorrect allocation of resources in the labor market. According to them, the problem is not so much flexibility as incentives.
Comparing Germany and Italy, they note that wages in Italy are rigid: in the short run they do not reflect changes in productivity, while in the long run, paradoxically, wages grow in sectors where productivity falls. And it is precisely these sectors that attract the greatest flows of employment. In short, Italy's problems are old and deeply rooted. Will it be the "right time" for new solutions?
