Stefano Scarpetta
Imagining Trend 28 August Aug 2020 0857 28 August 2020

Stefano Scarpetta: Italy has wasted 10 years, equality and young people are now the priority

In the words of the Director of Employment, Labour and Social Affairs at the OECD: “To recover from the crisis post Covid, we have to build fairer labour markets and focus on the new generations.”

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The Covid-19 health crisis has had a huge impact on the world of work. The impact was particularly significant in mature economies, where unforeseen problems linked to the health emergency came on top of already existing problems, such as the ageing population, the polarisation taking place in labour markets with the resulting increase in workers on ‘non-standard’ contracts, and the levels of debt which limit the scope for tax measures in times of crisis.

Where does Italy stand? “In just three months of pandemic, we have lost everything we had gained in the ten years since the 2008 recession,” explains Stefano Scarpetta , Director of Employment, Labour and Social Affairs at the OECD, speaking at the Think Tank ‘Welfare Italia’ organised by the Unipol group in cooperation with The European House during the webinar ‘The present and future of social policies in the new landscape: main actions and measures of the OECD countries’.

The progress made over the last 10 years swept away in a few months

According to the latest figures from ISTAT (Italy's national statistics bureau), since February 2020 employment levels have fallen by more than half a million people, job seekers by almost 400,000 with an increase in the number of inactive which now totals 900,000. “Between February and June 2020, the number of jobs advertised decreased by 30%,” Scarpetta adds.

In three months, we have lost all we had gained in the ten years since the 2008 recession

Stefano Scarpetta, Director of Employment, Labour and Social Affairs at the OECD

The same negative trend applies to the hours worked: “in Australia, Canada, Japan, Korea, Sweden and the US this figure fell by 12.2% versus the 1.2% recorded in the first three months of the 2008-2009 recession, in Italy the decrease was 27%.”

The most alarming figures relate to the future of work - employment figures will continue to fall significantly. “We have two scenarios ahead of us,” Scarpetta continues, “A single-hit scenario (the pandemic is under control) where by the 4th quarter of 2020 1.15 million jobs will have been lost and we can add a further 564,000 job losses by the 4th quarter of 2021.” The second scenario is possibly even more pessimistic – the double-hit where it is assumed that the pandemic will return in the months of October and November.

% fluctuation in total employment in two scenarios, Italy

Single-hit = pandemic under control; double-hit = return of the pandemic in October/November

“In this second hypothesis,” Scarpetta continues, “up to 1.48 million jobs could be lost by the end of 2020 and 708,000 by the end of 2021.”

The figures are not encouraging and the crisis could create even greater inequality for the more vulnerable workers. “There are four categories which, if suitable measures are not taken immediately, will be the most impacted by the crisis,” says the OECD’s Director of Employment, Labour and Social Affairs. “Low-wage workers, who are 50% less likely to be able to work from home and the risk is twice as high that they have stopped working; the self-employed, temporary or part-time workers because they have less social welfare coverage. And then of course young people: it’s enough to look at the youth unemployment figure which has risen from 11.2% in February to 17.6% in May, and then women who experienced the greatest loss of employment and have the heaviest domestic burden.”

“We have to build fairer, more resilient labour markets”

Stefano Scarpetta, Director of Employment, Labour and Social Affairs at the OECD

How can we overcome a crisis of these dimensions? “Solving the health crisis is still the sine qua non to solve the economic crisis. But now more than ever, we need to build fair, resilient labour markets. Just think that around half of the workforce is employed in jobs where they risk being infected and, until a vaccine or effective treatment becomes available, we need to take measures to protect public health to mitigate the pandemic: facilitate remote working where possible, apply suitable health and safety standards in workplaces, adapt the ‘Cassa Integrazione’ scheme (similar to furlough) to the recovery phase, review access to income support schemes to prevent an increase in poverty, invest in active policies and training, and above all do not lose touch with the younger generation: significantly relaunch and renew the ‘Garanzia Giovani’ scheme and help companies create new jobs.”

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