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Salaries in Italy: 30 Years of Stagnation and Challenges for 2024

In the third quarter of 2023, Italy seems to be coping with a decreasing unemployment rate of 7.6%, with an increase in fixed-term hires, especially among those over 50. However, celebrations are tempered by the news that Italian real wages have grown by only 1% from 1991 to 2022, compared to the 32.5% recorded in OECD countries.

The Inapp Report: An Alarm for the Economic Model

According to the Inapp Report presented on December 14, low labor productivity is the main culprit for this situation. Income distribution shows a constant fall in the wage share of GDP, while the profit share stands at 60%. Inapp raises the alarm, expressing “strong doubts about the sustainability of this model in the long run.”

Italy’s Structural Challenges

Beyond the wage issue, Italy faces structural problems, including low productivity that has grown less than wages. Productivity growth since 1991 has been significantly lower than in G7 countries, with a maximum gap of 25.5% in 2021. Inadequate training, welfare that does not cover all workers, and over 4 million “non-standard” workers contribute to the challenges.

Sebastiano Fadda’s Analysis and Prospects for 2024

Sebastiano Fadda, president of Inapp, expresses concern about the post-pandemic slowdown in the Italian labor market. Fadda emphasizes the need for targeted and swift interventions to steer the labor market towards sustained growth, considering the ongoing technological and digital revolution.

Salaries in Italy: Comparison with Europe and the Minimum Wage Proposal

The proposal for a legal minimum wage is at the center of the debate, but Italy seems to resist. Salary comparison with Europe highlights critical issues, with real wages falling by 7% in 2022 according to the OECD. Eurostat’s classification of national minimum wages shows the variety within the European Union.

Labor Shortage and Resignations

Inapp signals another worrying phenomenon: “labor shortage” and the persistent issue of resignations. The report notes 560,000 voluntary resignations in 2021 and 3.3 million people, 14.6% of the employed, who have considered resigning, seeking alternative sources of income.

Conclusions and Prospects for the Future

Wage stagnation in Italy is a challenge to be urgently addressed, considering the economic and social implications. While 2023 shows a positive employment balance, the comparison with 2022 raises questions about the real progress of the Italian labor market. 2024 will be crucial to understand whether Italy can overcome challenges and promote more sustained economic growth.

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