The Oxfam Report published on the occasion of Davos Summit indicates that in Italy inequality tends to grow, accelerated by the crisis and not countered by the recovery. The data reported confirm this and experience itself tells us that in times of crisis income and wealth inequalities tend to diverge. However, the affirmation induces a thought, however not declared by the drafters of the Report, namely that the rich get richer and the poor get poorer. And since wealth is not an independent variable, such that if one increases his share another must decrease his, the thought (which seems to me peacefully accepted in common opinion) seems to me to have to be disassembled and verified.
But first, a few observations on the growth of inequality: the Gini index, which precisely measures them (the higher the value, the greater the income inequality) gave the value 1995 for Italy in 33, in 2018 33,4. Inequality has increased, but very little. And in any case throughout the EU there is a tendency for the Gini index to converge slightly above the average of 30: still in 97 it ranged from 25 in Germany to 38 in Portugal, while now, with the exception of France, it 28,5, the indices are all between 31,1 in Germany and 33,4 in Italy. So it is obviously an exaggeration to speak of growing inequality in Italy: we are in the range of European values.
And anyway I want to return to the central question of this article: Is there a direct relationship between inequality and poverty in Italy? I would like to begin with two data which seem to disprove this hypothesis. First: the numbers provided by Oxfam are correct, showing that the richest 10% of the population hold 53,6% of total wealth against only 8,5% of the poorest 50%. But it is also true, as reported by the Luigi Einaudi Research and Documentation Center (Intesa-S. Paolo Group) in its "Survey on savings and financial choices of Italians", that the richest 10% reaches 50,6% in France and even 59,8% in Germany, countries where poverty is clearly limited and where the Gini index is even lower (much lower, in the case of France) than ours.
Therefore a strong concentration of wealth does not lead to cascading poverty and indigence. Second: in recent years, in terms of income, the "middle class" has grown in Italy, which statistically is defined as those who enjoy an income ranging from 75 to 150 percent of the average income, which in 2019 is 2.157 euros: the three central income brackets (from 1.500 to 3.000 euros) comprise 57,5% of income recipients, against 52,1% in 2018. And this is not at the expense of the higher income classes, which actually rise from 13,4% to 14,7%, but the lowest income classes (< €1.500) lose weight, going from 34,5% to 27,7%. (Data CR Einaudi – S.Paolo). That is, there was an overall income growth that involved about 70% of the population between 2018 and 2019.
It may be little but it certainly does not indicate an impoverishment! The thickening of the "middle class" is confirmed by another figure: the number of savers has once again exceeded that of those who do not save: 52%, from 2013% in 39. Since it is conceivable that the highest incomes were able to save even during the crisis, it is very likely that this increase in savings is attributable to the "middle class", which takes its members quite far from the risk of poverty.
However, there is a fact that seems to go the other way: the relationship between patrimonial wealth and income in Italy (however the figure is from the end of 2017, since then it should have changed slightly in favor of income) is 8,4 to 1 (Bank of Italy); in France and Great Britain slightly below, in Germany 6: normally the gap between assets and income is considered an index of social inequality. However, the composition of household assets in Italy has a peculiar characteristic compared to other EU countries: it is mainly made up of the house (48%).
And the reduction of poverty, modest when considering only financial assets, increases significantly if the total of real and financial wealth is considered: home ownership, which represents the main component of the wealth of less well-off families, is decisive in defining of the family's net wealth. So long as about 80% of Italians own the house in which they live, at least this amount (but probably more, considering the higher wealth groups who have second and third homes but live on rent) do not fall back into poverty.
Furthermore, since this form of wealth has remained largely unchanged through the crisis, it seems unlikely, linking this data with that already seen on incomes, that there has been an overt impoverishment. Oxfam rightly notes that the labor incomes of young people and women are low, but overlooks the fact that, in the case of women, low wages are due to part-time work, and that the female employment rate has increased significantly in the last 10 years. The low wages of young people must be considered in a context in which young people stay at home as long as possible, supplementing their income with family income. In fact, household incomes have been growing steadily since 2016.
I consider this model, in which the (low) incomes of women and young people are added to the salary of the head of the family and the grandfather's pension, archaic, as an obstacle to economic and social growth, but in economic terms there is no doubt that it wide poverty, at least in the short term ..! Conclusion: we are facing a trend that marginally rewards the highest levels of wealth, but not in a way that significantly increases economic inequality, and especially not that it increases poverty. The latter, however, comes at the cost of a "defensive" model of families, which inevitably penalizes innovation, entrepreneurship, investing, improving, social lift.
In conclusion, there seems to be a paradox: we are a country that complains of being poor, but who is not so poor, and who, however, hides away in defense of his modest wealth by proclaiming his own poverty.
