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State salaries closer to private individuals, but purchasing power will still drop from 2023

According to the CPI Observatory, based on the pre-agreement on renewal, state salaries recover compared to private ones, but they only defend themselves against inflation in 2022

State salaries closer to private individuals, but purchasing power will still drop from 2023

Over the next three years several thousand state workers they will cash out an average salary increase of 4,8%, equal to 125 euros more for 13 months. It establishes it the pre-agreement signed in December on the contract for the Central Functions Section, which concerns employees of ministries, tax agencies and non-economic public bodies such as Inps and Inail. The reference period is 2019-2021, but the renewal - despite having arrived years late - will produce effects from the moment it enters into force.

The relationship between public and private salaries

For a note from the Observatory of Italian public accounts edited by Giampaolo Galli and Edoardo Bella, thanks to this increase the ratio between public and private wages should return to the average of the last thirty years, after experiencing a sharp contraction over the past 15 years.

From the analysis - based on Istat data - it emerges that the salaries of state workers have passed on average from 27.300 euros in 2002 to approximately 35 thousand euros in 2010, to then stop due to the block on increases established to rebalance the state budget. Growth resumed in 2016 and two years later came the first significant increase, equal to 3%, contained in the contract renewal for the three-year period 2016-2018. “The overall increase since the signing of the last agreement to date was 4,1%”, specifies the Observatory.

The ratio between public and private sector wages rose until 2006, then fell steadily between 2009 and 2015, again due to the failure to adjust state wages. Subsequently, the ratio started to grow again, reaching a peak in 2018, and then falling again until 2021, due to delays in the approval of the national collective labor agreement 2019-2021.

"In 2022 there should be an increase that would bring it closer to the average - writes the CPI Observatory - This assessment discounts the hypothesis that, since most of the contracts in the private sector have already been closed, there is no generalized increase in wages in this sector".

The purchasing power of state salaries

As for the purchasing power of state salaries, its trend is parallel to that of the net salaries of the public sector: from 2002 to 2010 there was a significant increase (+8%), while then a decline began due to the blocking of increases and inflation (which was also low).

The ascent began in 2015, culminating in the increase in 2018. After that, "in 2020 real wages had reached the average value of the last twenty years - the note continues - but these increases were completely eroded in 2021, due to delays in the renewal of the CCNL and the recovery of inflation”.

The agreement on which an initial agreement was signed in December should serve precisely to limit this loss. Yet, based on the inflation forecast by Bank of Italy (3,5% in 2022, 1,6% in 2023 and 1,7% in 2024), according to the Observatory "real wages would be increasing in the current year and decreasing in the following two years".

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