Italy's labour market
Marching to a different tune
A bold move to free up employment
WHILE many people's eyes were on Greece, another southern European country was taking a very different approach to easing its economic plight. On February 20th Italy's left-right coalition headed by Matteo Renzi approved two decrees enacting the core of an employment reform that parliament had broadly endorsed last year.
The measures aim to close a yawning gap between Italy's labour-market “outsiders”, who are mostly younger workers on short-term contracts with scant entitlement to welfare benefits, and the protected “insiders”, typically older workers, who enjoy both job security and the certainty of an adequate pension.
The reform sweeps away a skein of temporary contracts, replacing them with one that affords new employees progressively greater safeguards until, after three years, they become entitled to a permanent job. On the other hand, the reform ends the right to reinstatement of workers judged to have been unfairly fired. (That entitlement will now be reserved mainly for victims of discrimination.) Compensation will be given instead.
That nullifies a clause in Italy’s 1970 Workers' Charter that the left holds sacred. Mr Renzi's determination to meddle with it has poisoned relations between the prime minister and a big minority within his centre-left Democratic party. But his reform also creates a new benefit for the involuntarily unemployed: a monthly payment of up to 1,300 that can last for two years, but which starts to taper after four months. At the end of two years, a jobless worker becomes entitled to lesser benefits.
The reform has limitations. It does not affect public-sector workers, who are almost impossible to get rid of. It only applies to new hirings (though, since so many of Italy’s workers are now on short-term contracts, its effects will soon be felt). The unions hate it, but employers, who will get generous incentives to use the new contract, welcomed it. Mr Renzi said it meant that “rights enter the vocabulary of a generation that hitherto has been excluded.” It will help create jobs and prosperity, added his finance minister, Pier Carlo Padoan.
此次改革亦有弊端。公共部门人员失业可能性很小，因此不会受到改革的影响。它仅适用于新职员工（然而，很多意大利工人目前的工作属于短期，改革的影响不久就会见效）。工会对此嗤之以鼻，而雇佣方则欣然接受，他们通过使用新型合同获取大手笔奖励。伦齐表示此举意味着“至今还未享有权利的一代人从此有了权利。”其财务大臣Pier Carlo Padoan另外表示，这将有助于增加就业机会，创造繁荣景象。
Both are sorely needed.Italy's unemployment rate is 12.9%, but among those aged between 15 and 29 it is 42%. The economy remains obstinately static, though most forecasters predict growth of around 0.6% this year. The hope is that the reform will raise productivity, cut unemployment and encourage investment, particularly from abroad.
But there are also some doubts. One is whether bosses will in fact start to hire more freely. And since those already in permanent work will be put on the new (and, for them, less advantageous) contract if they change jobs, there is a chance the reform could discourage labour mobility.
The bigger question is what comes next. Labour-market measures were rushed onto the government's agenda last autumn only when it became clear the economy was not recovering. Mr Renzi's priority remains political and constitutional reform, which he views as essential for decisive government, and for enabling further economic measures that Italy needs. Privatisations and some limited liberalisation are planned. But if the economy does revive, such reforms might once again go on the back burner.