Lavoro Tempo Determinato Morning Future
Imagining Trend 27 August Aug 2018 0830 27 August 2018

Is Italy facing a future of fixed-term contracts? Yes, and it needs employability policies and a new welfare system

The figures speak for themselves: Nine jobs in every ten have a fixed term. This is a widespread trend throughout the Western world and it seems difficult to stop it. But really, facilitating transition between jobs and implementing universal welfare would boost employability

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The first figure: of every 100 jobs created in the last 12 months, one is permanent, four are in self-employment and 95 have a fixed term. Moreover, these numbers are perfectly in line with the European Union averages. This is proof in itself that the job market - barely affected by the laws in force, whether strict or lenient - is not undergoing structural changes. We need to look much more carefully at new types of jobs and at companies whose life spans seem to get shorter and shorter. There is an endless line of revolutions in manufacturing and new global competitors entering the market. Companies increasingly need to be able to offer some form of flexible working, in order to adapt to changing market conditions and maintaining high productivity at work.

In recent years, policy has tried (in vain) to invert this tendency. The Jobs Act, for example, established a standard contract that increased job security in order to encourage companies to hire on a permanent basis. And the recent “Dignity Decree” reduces the power of Italian legislation with regard to those standard contracts and, in the months to come, will introduce initiatives that aim to remove the end date from fixed-term contracts. It is hard to believe it will work. According to labour law expert Pietro Ichino, “We need to change how things work across Europe, whether a country has legislation in place to prevent employers getting rid of workers on permanent contracts or whether a widespread culture of fixed-term contracts is at fault. This change can only be made effectively if we remove the dichotomy that there are only either fixed jobs or precarious ones.” Francesco Seghezzi, Director of ADAPT (a non-profit organisation promoting studies and research in the field of labour law), also believes it is not just legislation that has an impact but “a general issue of economic uncertainty and uncertainty in the international markets.”

If creating laws that change contract types in order to transform the market does not work, it seems more appropriate to push in one of two alternative directions. The ​first, is encouraging employability.

What is it we need to do, then? If creating laws that change contract types in order to transform the market does not work, it seems more appropriate to push in one of two alternative directions. The first, isto encourage employability, close the gap between supply and demand when it comes to jobs. This is a problem that, unlike the boom of fixed-term contracts, is very specific to the Italian labour market and primarily concerns policies on how schools prepare their students for the workplace and active labour policies. According to the OECD, Italy has the highest skill mismatch rate in Europe, followed by Spain, the Czech Republic, Ireland and Austria. The OECD also says that Italy is facing more than simply a skill mismatch, but rather an educational mismatch, linked to the education of young people, which is not adapted to the demands of the labour market, thus is not useful in acquiring the indispensable skills needed to find and keep a job. That is not all: Italy is the only G7 country in which there are more graduate employees in jobs involving routine tasks than there are in those involving non-routine activities. In other words, the only country in which graduates may have jobs but jobs for which they are typically over-qualified. Moreover, “surprisingly - and despite the low skill levels that characterise the country, there have been numerous cases in which employees had skills beyond those their job required, reflecting the low demand for skills in Italy. Employees with extra skills and those over-qualified account for a large proportion of the Italian workforce, amounting to 11.7% and 18% respectively.” And in addition, “Around 35% of employees work in a sector other than the one for which they studied.”

Alongside employability policies, welfare reform is vital. It needs to be universal and work in harmony with the job market.

Alongside employability policies, welfare reform is vital. It needs to be universal and work in harmony with the job market because of how it is developing. The focus therefore needs to move away from simply protecting permanent jobs. There is a need to begin to promote ‘reskilling’ and the ability to quickly bring employees previously on fixed-term contracts up to speed in new jobs. On this point, Italy once again falls behind the rest of Europe. To give some examples: those looking for work in Germany can count on the Arbeitslosengeld II. Under this system, the unemployed receive 382 euros a month in addition to rent, healthcare, reduced rates on public transport and heating, plus an additional 224-289 euros per month for every child, depending on the child’s age. In Belgium, the Droit à l’intégration sociale is 755 euros. Where there is a dependent family member, it goes up to 1006 euros or for two children up to 1300 euros, supplemented with social housing or rent support. The Sozialhilfe in Austria guarantees single individuals 500 euros a month and couples with children up to 1300. Jobseeker’s Allowance in the UK is a similar - but very complex - system. It assigns benefits, to which Housing Benefit - to assist with rent - is added, as well as Income Support for those working fewer than 16 hours a week. France’s Revenu de solidarité active grants a subsidiary to those whose monthly income is below the French minimum wage of 1238 euros a month. In each of these instances, the minimum guaranteed income is supported by active policies to train the unemployed so they can get new qualifications. They are offered jobs they must take or otherwise lose their benefits.

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