"In Italy the main cause of the absence of foreign investment is the excessive protection of labour". This statement summarizes the thought widely shared by the actors of the political-economic world on the subject of work. The representation of this excessive protection is given by article 18, defined several times as an "Italian anomaly" or "brake to development".
The provisions being studied by the Monti government and the declarations of the prime minister himself therefore carry forward this line of thought, as had already been done by the previous government and, in particular, by the Minister for Welfare Sacconi.
However, an objection could be made. An interesting result emerges from the data processed in the OECD dossiers regarding the real level of labor protection in our country in relation to international competitors. Being also able to cross-reference the data relating to incoming foreign direct investments provided by UNCTAD, a real Italian situation emerges that is different from that envisaged up to now.
Let's get to the data.
The OECD has elaborated an index which measures the level of legislative protection of the work (“Employment protection legislation index”) which varies from 0 to 6 according to the restrictiveness of the national legislation, where 6 represents the highest level.
Well, this index for Italy is equal to 2,58 against 2,63 for Germany, 3 for France, 3,11 for Spain. But this index tells us something even more important; in fact, it is divided into three different components, and one of these measures the level of protection against individual dismissal of permanent workers ("Protection of permanent workers against [individual] dismissal"). Let's see how the Italian situation is evaluated in relation to other countries: Italy 1,69, Spain 2,38, France 2,60 and last but not least Germany 2,85.
According to these data, therefore, the Italian legislation on the protection of the workplace turned out to be less anomalous than previously thought.
If job protection is linked to the lack of foreign direct investment (FDI), we should expect countries such as France, Germany and Spain, but not only that, to register levels of FDI in relation to GDP lower than Italy and, more generally , to countries with more permissive labor protection legislation.
Again, there is no evidence to support this claim. In fact, Italy records a level of incoming FDI as a ratio of GDP of 16,4%, lower than the 20,4% of Germany, and clearly lower than the 39% of France and the 43,7% of Spain, despite as we have seen, these countries have stricter labor legislation.
Therefore, the problem of Italy's lack of attractiveness in relation to foreign investments must probably be sought elsewhere, for example in bureaucratic slowness, in the absence of certainty and speed of judgment in disputes, in the absence of adequate infrastructures and in the presence, increasingly distributed throughout the country, of a hidden cost represented by organized crime.
A comparison table is attached.
Attachments: Employment protection legislation index and FDI inward.pdf
