Employment has picked up again in 2022, even if it is too early to breathe a sigh of relief because the problems of the Italian labor market are far from being resolved. This is what emerges from the latest study of Study and Research Center for Social Security Itineraries which positively evaluates the trend in the first half of 2022 but also warns the media, politics and social partners from easy enthusiasm. In fact, beyond the good results, the main Eurostat indicators show that Italy continues to bring up the rear in Europe: by global employment rate (60%), where even Greece does better with 60,6% (69,9% European average); for female employment (51%, like Greece, against 64,9% in the EU); for youth employment, where it is third last among the 27 EU countries (19,8% against an average of 34,7%); for senior occupation, where only Greece, Croatia, Romania and Luxembourg fare worse (54,9% the Italian figure, 62,6% the European average). In addition to these data, some critical elements cannot be overlooked, linked both to external factors, such as the surge in inflation and the difficulty of procuring raw materials and energy, and intrinsic to the market itself, starting with the obvious question of mismatch between supply and demand for employment.
The trend of the labor market in 2022
After the positive employment recovery of 2021, which allowed for a significant recovery on levels record touched in 2019 and collapsed in 2020 following the Covid pandemic, 2022 has been defined by many observers as the year of the "rebound". In reality, Italy has gone beyond a simple rebound, with GDP overcoming the 8,9% loss of 2020 in the last two years (+6,6% in 2021 and +3,9 in 2022) ; and the same goes for exports, industrial production (increased by 0,5%) and above all for employment. Istat certifies that in December there were 23 million and 215 thousand employed, ie 334 thousand more than 12 months ago (+1,5%). This is the umpteenth record in employment that occurred in 2022, just as the employment rate is a record, which reaches 60,5%.
Two positive factors are to be underlined. The first is that the growth in employment has also involved the normally most disadvantaged segments of the population: for the women the employment rate reached 56,6% for the first time young (15-24 years) 20,6%, share not touched since the early 2000s. The second is the all-time record for permanent contracts: in 2022 they steadily exceeded 15 million.
Employment is growing but not in all sectors
And here the sore points begin. If on the one hand it is studio it indicates a favorable scenario for the consolidation of the Italian labor market, on the other it highlights that job creation is not the same in all sectors. The industry manufacturing and that of the construction they made the maximum of stable starts, while e services – users of fixed-term and/or seasonal contracts – had start-ups in the first half of the year, to then reset them or even go negative.
The Observatory draws a labor market divided in two: on the one hand, ICT, manufacturing and construction which create stable and qualified work, and on the other services which mainly use generic labor on an occasional basis, which shows growth almost zero productivity, and generates jobs for low qualifications and very often part-time, moreover involuntary. Thus a real fault is established in the labor market: in which poverty of the workforce in terms of skills and poor quality and productivity of the company feed each other, losing all the trains of innovation and professional growth.
Does the Great Resignation really exist in Italy?
In 2022 there was much talk of the Great Designation in Italy, namely those "mass resignations" according to which young skilled workers are looking for more rewarding tasks compatible with extra-work activities. A utopian reading according to the Observatory, at least for our country.
Voluntary resignation is a phenomenon that arises whenever the growth of the economy creates jobs that people can choose because better paid or for other conveniences. According to INPS and Ministry of Labor data, in the fourth quarter of 2007, upstream of the first major international crisis, the voluntary resignation they were a number equal to 4,09% of employees, in the third quarter of 2008 3,35%. In the first quarter of 2022 they reached their most recent high with 3,2% (INPS-Ministry of Labor data). But the most significant element to highlight is that it is not mainly the young professionals who resign to change jobs, but above all the workers without educational qualifications e those over 50 (hunting, the former, for better wages). On the other hand, all these people, as can be expected, resign only when they have the certainty, or almost, of a new job: 40% re-employed within a week; data, the latter, however, not exceptionally higher than the percentages recorded in analogous situations. In November 2017 the value was 33%.
The continuous mismatch between supply and demand
In a normal labor market this would create a favorable supply relationship, leading to an increase in wages and employment. In Italy it does not happen, or at least only marginally. In fact, there is actually a gigantic lung between question e job offer.
Even more surprising, however, are the reasons for the failure to find di workers: mostly attributable to a lack of candidates and only to a lesser extent to a lack of preparation of the candidates (24,6% compared to 12,4%). It should be noted that this reason is constantly growing, doubled since 2018, while that relating to the inadequacy of candidates remains substantially stable between 11% and 12%. In any case, this failure to match supply and demand seems to be the major problem of the labor market: both in the "high" segment, where what is missing is the professional profile, and in the low one where supply is lacking, there is no certainly encouraged by the salaries that sectors with zero production growth and low professionalism are able to offer.
And then there is another phenomenon that is catching on: that of t'sextracurricular internships which for businesses can become a valid alternative to more demanding and formalized contracts such as apprenticeships.
Italian youth (un)employment: some myths to dispel
But does Italy really lack young workers? And are they less paid than their European peers? In Italy, in 2021, i unemployed youth they were 9,5% of the working-age population, against 3,6% in Germany, 7,9% in France, 7,7% in the Eurozone. In general, in the EU, only Spain and Greece are worse off than us. However, going into the detail ofyouth employment existing, an interesting fact emerges: in the 15-24 age group 23,9% of the employed work part-time, but in Denmark they are 45%, in Germany 24%, in the Netherlands 54% and in the Euros 25%. The data on fixed-term contracts should also be noted: in Italy 61% of young people between 15 and 24 are employed on a fixed-term contract. Value not far from the French (56,1%) Swiss (54%) and even lower than the Dutch (68%), proving a widespread condition, for that age group, throughout Europe.
Another interesting factor is that young Italians are no more underemployed than their European peers, even if they are less qualified. But surprisingly they don't have "hungry" salaries compared to the EU average: in the under 30 bracket, for a full time job, the average gross salary expressed in PPS (Purchasing Power Parity) is 25.123 euros (Eurostat 2018 data); in France it is 23.434 euros, in Germany 30.187, in the UK 25.132, in the Netherlands 28.518 euros. Young Italians who receive a poor salary (i.e. less than 2/3 of the national median salary) are 15,94% of the total, 15,85% in France, 32% in Germany and 45% in the Netherlands (in in these cases the intensive use of part-time work is decisive); in the Euro area the figure amounts to 28%.
Although these data demonstrate how the working conditions offered by the market to young Italians are completely similar to those of young Europeans, Italy clearly differs in the participation of young people in the labor market: our country is second only to Romania in EU to 27 countries by number of NEET (Not in Employment, Education or Training) – young people who at a given time do not study, work or receive training – in relation to the overall population. Although probably a large number of NEETs coincides with undeclared work.
What are the prospects for employment in 2023?
Despite the specter of recessionforecasts for the Italian economy are rather positive: according to international financial institutions, GDP should grow between 0,2% and 03%, (perhaps even 0,7%) investments should grow by 2% and inflation fall to around 5%, while according to Istat forecasts, employment could gain another half percentage point. In this scenario, the market should show an increase of around 116 units, well below the demand which, obviously, is expected to be no less than 2023 for 2022 (quite the contrary!). Most observers argue that the relative slowdown in the economy will also cool the phenomenon of voluntary resignations. However, the main problem will remain that of matching labor supply and demand.
The solutions of the Social Security Itineraries Observatory
After decades spent telling each other that "there is no work" it would in short be the time to admit that there is work but there is a lack of workers and, even more so, adequate tools to facilitate the matching of supply and demand. Hence, the need for more investments in active employment policies, too often neglected in favor of welfare measures which, in addition to not solving problems, end up aggravating an already monstrous public debt, to the detriment of the younger generations. The main element of concern is the degree of sustainability of our welfare state.
The decisive terrain is that of guidance and training, but the question of female employment in particular must also be addressed by identifying new social policies, such as the availability of nursery schools at controlled rates and the deductibility of costs incurred for assistance to family members and to evaluate the effectiveness of other instruments such as the taxation of part of the social security contributions of the female workforce. The issue is not simple, even for hedging, but serious reflection is needed to initiate gradual but constant growth dynamics in the interest rate female occupation. This should be a priority, precisely because it could be one of the most concrete answers to grow the ratio between active and retired in our country.
