After almost twenty years of running up, Spain has made it. The data, which is little known, can be seen on the online database of Eurostat. In the second quarter of this year, Spain's real labor productivity caught up with Italy's. Value added per hour worked, considered net of changes in purchasing power, now stands at 32 euros in both countries. The Spanish run-up has materialized in the increase of about fifteen percentage points in productivity over the last ten years. Conversely, today in Italy the real productivity of labor is substantially the same as it was in the early XNUMXs.
In addition to Spain, significant increases in labor productivity over the past ten years have been recorded by the two main economies of the Eurozone. Both in Germany and in France, the value added per hour worked grew by just under ten percentage points and is now at absolute levels at least ten euros higher than ours. The other major countries of the single currency have gone ahead, without overdoing it. We stood still. In the case of Spain, the improvement in productivity has manifested itself above all in the most recent years marked by crises and recessions.
The Spanish lesson has nothing miraculous about it. The Iberian economy has gone through what economists call "labour-shedding", the massive loss of jobs. Between mid-2008 and mid-2013, the number of hours worked fell in Spain by seventeen percentage points against a drop of seven points in Italy. Of the great protagonists of the single currency, only Germany has managed to achieve an increase in labor productivity in a context that economists call "labour-hoarding", i.e. the preservation of jobs. Today in Germany the amount of hours worked in a quarter is the same as it was five years ago while the added value generated by one hour worked is three percentage points higher.
Spain and Germany show us two different ways to improve productivity. The Spanish one consists of a recovery of efficiency operated through a dramatic drop in the general levels of employment. The system has increased productivity, albeit with a very high social cost. More than the structural reforms, which may come in the near future, cuts and reorganizations have been made in Spain. In Germany, on the other hand, with the same labor input it was possible to produce more. Thanks to many elements, both internal and external to the business world, starting with the beneficial and lasting effects of the labor market reforms launched in the early XNUMXs.
In the long run, the quality of the flexibility ensured in Germany by the Hartz reforms proved to be decisive, above all in terms of ease of operation and economic and social sustainability. If in Spain less work and less product are accompanied by greater productivity, in Germany the same labor input has generated more product and more productivity. Only in Italy are the three quantities in question falling back simultaneously. Less work, less product and less productivity. Behind the operation of this downward spiral is the effect of a qualitative deterioration that reflects the results of an extensive manufacturing deindustrialization. Since the beginning of the 2008 recession, the manufacturing added value, measured in volumes, has fallen in Italy by a good eighteen percentage points, exactly double the nine points fall in real GDP.
Between mid-2008 and the second quarter of 2013, the weight of manufacturing in the total value added produced in Italy fell by about three percentage points against a drop of less than one percentage point in Spain. Today manufacturing accounts for fifteen percent of the product in Italy and thirteen percent in Spain. Only in Germany has the incidence of manufacturing remained constantly above that twenty per cent which also constitutes the European objective for 2020. Very clearly the new report on competitiveness published by the European Commission identifies the recovery of manufacturing as the driving factor for a recovery of productivity at the continental level. The weight of manufacturing on research and innovation is four times greater than the incidence of the sector on the GDP of the European Union.
For Italy, however, the productivity deficit affects services as well as manufacturing. A couple of examples. In recent years, the value added per hour worked in the production of means of transport has remained unchanged in Italy, while it has grown by ten points in Germany. At the opposite end of manufacturing, in a strategic sector of services for us such as that of accommodation and catering services, hourly labor productivity in Italy remains one third lower than in Spain. Within our recession there is a double deficit, of quantity and quality, of product and productivity. Similarly, the decline in manufacturing is compounded by a service innovation problem. Breaking these negative spirals is necessary in order to give new breath to our competitiveness and create the conditions for a lasting re-employment of lost work.
