"L 'economy gets better? But who noticed? THE wages continue to decline, the precariousness it is heavy and our young people continue to go abroad if they want decent work and the problem is how wealth is redistributed”. It is a gloomy and dramatic vision of the Italian economy expressed by the general secretary of the CGIL, Maurizio Landini, who when he speaks always makes one regret the three great trade unionists that his Confederation had as leaders in the twentieth century: Giuseppe By Vittorio, Lucian Lama and Bruno Trentino.
The numbers, however, are numbers and the numbers belie Landini's analysis and even more so his recipes on wages and employment, very different from those illustrated with balance and wisdom by the Governor of the Bank of Italy, Ignazio Visco in his latest Final Considerations of 31 May, relaunched yesterday at the Turin International Economics Festival.
Let's start with the macroeconomic picture and then go down to the proposals on employment and wages. "GDP, Italy continues to perform better than France and Germany" headlines "la Repubblica" on 0,6 June and "Corriere della Sera" echoes it: "Italy is growing faster, GDP at 0,6% ahead of USA, France and Germany”. These are not journalistic fantasies but what the Istat surveys say, according to which Italian growth in the first quarter was 1,9% and could reach 2023% at the end of the year. After all, Visco's final considerations on the Italian economy are very clear: "In dealing with the consequences of the war in Ukraine as well as in emerging from the pandemic, the Italian economy - says the Governor - has shown a comforting capacity for resistance and reaction" which suggests, on the basis of the data available today, that for the whole of XNUMX growth will settle at "around one per cent", that is, "better than we expected".
Employment: permanent contracts are growing and fixed-term contracts are decreasing, but precariousness is still high
What is more important is what growth brings work and it brings less precarious work, even if the critical issues have obviously not disappeared by magic. The trend, which Landini continues to ignore, is clear and Istat has once again confirmed it, according to which employment grew in April by 48 units compared to March and by 390 units compared to April last year. But there is another even more comforting fact that Istat highlights: in April permanent contracts increased (+74 in the month and +468 in the year) and fixed-term contracts decreased (-30 in April and – 149 thousand in the year). A drop in the ocean of precariousness? Maybe, but why ignore the trend reversal and not try to understand and cultivate it? In fact, the Governor says: “In 2022, with the sustained recovery in labor demand, the transformation of temporary contracts into permanent ones has grown considerably. In many cases, however, fixed-term work is associated with very prolonged precarious conditions and the percentage of young people who still find themselves on fixed-term conditions after five years remains close to 20 percent”.
In essence: the Italian economy is doing better than expected, permanent employment is growing and fixed-term contracts are decreasing but there is still a lot to do to counter precariousness and we must be careful not to take illusory shortcuts.
Wages: Visco's recommendations and Landini's amnesia
And the wages? For Landini "wages continue to fall". According to Visco "inequality in hourly wages has remained limited" among employees of private companies but "the share of workers with particularly low wages has still risen, up to 30% from 25% in the last few years of the last century" and it is also this serves to fix a minimum wage by law.
So what can be done to increase jobs and wages? Let's start with salaries. Here the recipes of the CGIL and the Bank of Italy diverge clearly. Landini seems to rely, in addition to the renewal of contracts, above all on the State, invoking not only a one-off but permanent cut in the tax wedge but without specifying where to really find the resources and scientifically forgetting any correlation between wage dynamics and productivity trends. On the contrary, he recommends the Governor: 1) No to the "vain race between prices and wages" but moderation in trade union demands and the need for companies to "lower prices"; 2) No to the surreptitious restoration of forms of escalator and exclusion of a wage dynamic that replicates that of past inflation; 3) Yes to the introduction of the minimum wage by law and the recovery of purchasing power through "more sustained growth in productivity", which shows signs of improvement "after a long period of stagnation".
What about employment policies? Here, too, the recipes differ. Landini calls for public investments, repudiates the Jobs Act even if it has allowed the creation of a million jobs and dreams, like the secretary of the Democratic Party Elly Schlein, the Spanish model of the fight against precariousness which reduces fixed-term contracts but – unlike the Jobs Act – leaves a free hand to companies for layoffs. On the contrary, for the Bank of Italy employment does not foresee shortcuts but it is the effect – a dependent variable – of the growth of the economy which cannot fail the unique opportunity of PNRR, made possible by huge public investments but also by reforms.
The sooner Landini's CGIL and the sooner the right-centre government are convinced of the validity of the Bank of Italy's recipe, the better. Otherwise on wages, the fight against precariousness and employment we will hear only sterile ejaculations.
