Gualtieri Morning Future
Guiding
Investigation 14 August Aug 2020 2015 14 August 2020

Italy’s reform package: the government’s plans on the issue of work

The country’s main concern is how to increase productivity and improve skills. The implementation of active policies and a greater focus on female participation in the labour market are also planned

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One hundred and seventy-seven times. The word work is ubiquitous in Italy’s reform plan (the PNR) presented by the government in early July. The document, usually released together with the draft budget, has attempted to transpose the recommendations made by the EU in its latest Country Report. Published in February 2020 just before the outbreak of the pandemic, it highlighted Italy’s high public debt and low labour productivity. The package outlining the government’s economic measures over the next three years will be a crucial step toward the reforms that Brussels is expecting before it writes out a Recovery Fund cheque for 209 billion euro.

Work is one of the government’s main focus points and one of its five priorities. Causing greatest concern is the lack of productivity growth attributable to “a lack of skills and a mis-match between the skills available and the real needs of companies” the document states. But the skills mis-match is not the only issue: Italy’s high youth unemployment at 20.3% is compounded by the highest numbers of NEETs in Europe, young people who are Not in Education, Employment, or Training. The gender employment gap also shows no sign of improving with low female participation.

On this point, the government’s goal is to strengthen social welfare measures and active labour market policies, starting with job centres. The numbers show just how urgent the problem is: in April 2020, the employment level reached 59.7%, a drop of 1.1% year on year, while the inactive figure was 38.1%, up 4% year on year. In response to these figures, the government plans to increase the number of job centres, hire 11,600 additional staff over three years and improve the infrastructure and services of job centres.

The subject of job centres is inevitably bound to the so-called citizenship income. According to government data, just 65,000 out of a total of one million recipients of this income have managed to find a job: as it strengthens its active labour market policies this is a clear focus point for the government.

Causing greatest concern is the lack of productivity growth attributable to a lack of skills and a mis-match between the skills available and the real needs of companies.

Regardless of the inevitable impact of Covid-19 on employment, the government plans to evaluate whether and how the citizenship income scheme should be improved, its original aim being to improve the status of its recipients as well the processes for getting them back into work. Their analysis also includes the ‘Quota 100’ pension scheme: the pilot phase of the current pension reform system ends in 2021 and it could see some adjustments to make it more sustainable.

Another crucial issue for the government are labour market gaps, the supply and demand of skills, and gender equality on pay and opportunities. In the governments’ opinion the skills gap can be addressed through the education system and by aligning education with the needs of the economy, especially in training digital and financial know-how, and English language skills. On the gender employment gap, which Europe has asked the country to close, the government has pledged to facilitate the reduction in social contributions for women, increasing them where there is a greater gap between the two genders. The government also intends to introduce legislation focusing on female participation, with an equal distribution of genders at board and corporate governance levels.

The reform package also analyses general working conditions, particularly collective bargaining. The government is also looking into a minimum guaranteed wage to help all workers maintain a fixed level of purchasing power, even when there is little or no trade union representation in their workplaces. There is a willingness to continue talks between employers and employees, which the government would like to incentivise by possibly reforming trade union representation.

Covid-19 has also changed workplaces, impacting where and how people work. As a result, the Italian government has tabled a discussion among the players to facilitate the reopening of businesses in total safety. For those who use smart working, in its Relaunch Decree the government advocates for a “New Skills Fund”, which would allow employees to follow training programmes during work hours with the state paying social and pension contributions.

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