Who creates jobs: the public sector or the private sector? This is the question that theItalian Public Accounts Observatory (CPI) with an article written by Giampaolo Galli, who directs it, together with Leonardo Ciotti and Michela Garlaschi. Looking at the graphs and numbers, in an era of great resignation, the conclusion seems to be this: if there will be job creation in the next few years, it will almost certainly come from the private sector. "A certain skepticism about the ability of the economic system to create employment "spontaneously" and above all quality jobs - observe the researchers - can be justified by the fact that between 2008 and 2019 employment underwent strong fluctuations according to the cycles of the cheap, but has not increased. The situation improved in 2021 and 2022. Some indicators, such as the employment needs for 2023-26, suggest that the job creation can continue in the current year, albeit at a reduced pace, despite the expected slowdown of the economy and the difficulty of finding the necessary professional figures”. But let's see in detail how these conclusions were reached.
Employment rate and number of employed persons
Without dwelling too much on the dilemma of whether the jobs generated in the public sector or those generated in the private sector are more important, the article from the Public Accounts Observatory goes straight to the point. “Between the early 2008s and 2,5 – write the three economists – around 2008 million jobs were created. But things have changed dramatically in recent years. Following the double crisis that hit Italy (the financial crisis of 09-2011 and the sovereign debt crisis in Europe of 12-2008), more than one million jobs were lost between 2013 and 2022. In the following years there was a slow recovery, but still in 2008 the number of employed people was slightly below the XNUMX peak". Employment dynamics, they then observe, are also determined by demographic issue. “In recent years there has been a sharp reduction in people of working age as young people entering the labor market have been much lower than elderly people leaving”. And this is also one of the reasons why many companies complain about not finding young people to hire.
Public and private employment
Graphics matter more than words at this point.
From what can be seen in the figure above, some considerations can be drawn:
- public employment (OECD data) is a modest percentage of the total, ranking, depending on the year, between 15 and 16 percent of the total. It has declined sharply from 2008 onwards, having dropped nearly 9,5 percent, from 3,65 million to 3,3 million in 2021. This fall can be attributed entirely to Italy's public finance woes,
- private occupation instead it suffered a loss of almost 1 million jobs between 2008 and 2013, and increased at a fairly rapid pace; between 2014 and 2019 the growth was 5,4 per cent, corresponding to about one million jobs lost in previous years. Private employment collapsed in the year of Covid (-720 jobs), but quickly recovered in the following two years, as shown by data on total employment. Public employment, on the other hand, remained constant in 2020 and decreased slightly in 2021 (-3 per cent).
What are the prospects for the next few years?
The scenarios envisaged in the latest Excelsior report by Anpal-Unioncamere last June - mentioned in the CPI Observatory article - indicate that in the two-year period 2022-23 the public sector could register an increase of 36 employees. Very few. In the period 2022-26, on the other hand, the expectation is 840 hires, including those envisaged by the Pnrr, but 92 percent will serve to replace outgoing employees. It would already be uninspiring but it becomes downright depressing if one considers that the Update Note to the Economic and Financial Document (Nadef) envisages a reduction in the coming years of expenditure for public administration income from work. “After an increase in 2022 of 6,6 per cent to 188 billion (entirely due to the recovery, however partial, of inflation), expenditure on labor income is expected to fall to 187, 185 and 186 billion respectively in 2023, 2024 and 2025.” Therefore it will not be from the State that an increase in employment will arrive, numbers in hand, is the conclusion of the Observatory.
Let's see what is expected to happen in the private sector. The last Excelsior bulletin “indicates a good 504 workers sought by companies in January and 1,3 million for the first quarter of the year. This would result in 46 more hires than in January 2022 (+10 percent) and +149 hires (+12,9 percent) taking the entire quarter as a reference. According to these scenarios, "the expected job demand at the beginning of year is above pre-Covid levels and marks a +14,0% (+62 hires) compared to January 2019".
However, a decisive factor plays a role in cooling enthusiasm: the difficulty in finding professional figures on the part of companies: the difficulty in finding managers is as high as 66% and almost 62% as regards skilled workers.
Only economic growth can create jobs
The conclusion of the Observatory is, at this point, that only economic growth can create new jobs. be it public or private. And if for the United States it may be worth remembering Okun's law - from the name of the US economist who in the early 1s developed an econometric model that linked GDP growth with the unemployment rate - for Italy the three economists rely on the Bank of Italy's econometric model. “According to this model – they recall – a 0,4 per cent increase in output generates an increase in the demand for labor in the private sector (excluding the energy and agriculture sectors) equal to 0,6 per cent in first year and 1 in the second; subsequently employment increases slowly up to +XNUMX per cent when fully operational”.
The conclusion is clear: "There is no doubt that growth policies are crucial to improve the quantity and quality of jobs, among which the elimination or lightening of the many bureaucratic burdens which make it difficult to do business in Italy”.
