The improvement of labor market conditions in Italy has positive aspects that are intertwined, however, with critical issues that come from far away.
The number of employed people increased, exceeding 24,8 million. Since the 2013 low, 500 jobs have been created, less than half of those previously lost. More than 530 are needed to return to 2008 values. The increase in employment was accompanied by a more robust increase in hours worked, which on an aggregate level had fallen by more than 9% during the crisis.
In 2016, the total hours worked in the Italian economy once again approached 43 billion, however remaining approximately 3 billion below 2007. The increase in employment and hours worked favored a recovery in the total value of wages, which, however, developed at a moderate pace, as a consequence of the weak growth of wages.
Moving from aggregate data to data per employee, however, it is clear how the crisis has accelerated processes that have been underway for some time, making some critical issues more evident, which the recovery has managed to correct only in part.
During the recession, the average hours worked each year by an employee decreased from 1.818 to 1.717, continuing a trend which, albeit more gradually, had also characterized the previous period. Despite the recovery in recent years, in 2016, an employee in the Italian economy worked on average almost 90 hours less than in 2007, a drop close to 5%.
Since the outbreak of the crisis, there has also been a significant slowdown in wages per employed employee. In the previous fifteen years, they had increased at an average annual rate of more than 3%, going from 16.781 euros in 1995 to 24.853 in 2008. In the last eight years, the growth rate has fallen to 0,7%, less than a quarter of the previous trend, with the value rising to 26.284.
The weak growth in prices in recent years has partly attenuated the effects of this slowdown on the purchasing power of wages, which is, however, part of a trend of weak growth which has affected all the last twenty years: between 1995 and In 2016, the purchasing power of wages per employee in the whole economy increased by only 3% overall.
