There are Still Few Permanent Contracts in Italy

Trade and Economics - December 21, 2022


 In 2021, only 14.8% of new contracts concerned permanent employment

Despite some signs of recovery in the labor market, recorded last year, in contrast with the data of other European countries, the new statistics contained in the “Inapp Report” show a professional system still strongly focused on precariousness and almost 70% of all new employment contracts entered throughout 2021 relate to temporary employment. A very similar figure dates back to 2018, before the crackdown of temporary hiring, when permanent contracts were 14.6%.

Such a high percentage of “fixed-term” employment contracts is also given by the high number of very short-term hires and a single worker could have registered more fixed-term hires in a single year, thus increasing the percentage of the total.

There are also many so-called ‘involuntary’ part-time jobs, which more and more people are now being forced to accept in order to have a job that in any case does not allow the desired stability. The OECD average for part-time work is 3.2 per cent of all contracts concluded, while in Italy it will only rise to 11.3 per cent in 2021.

Another fundamental point of the analysis carried out in the Inapp report is the unacceptable difference between Italy and the other European countries in which, from 1990 to 2020, the real minimum annual wage increased by about 30% despite a decrease in 2.9% in the Bel Paese. The scourge of ever lower wages was then joined by poor productivity, which has apparently become chronic, on the part of Italian industries which will have to be reactivated thanks to new labor policies capable of improving the situation relating to precarious professional positions and with little opportunities of career advancement, to which new hires and low-income workers are traditionally relegated.

To remedy a situation that could worsen in the short future, with the difficulties foreseen due to the feared energy crisis, it would be necessary to find a solid link between the increase in productivity of Italian companies, however expected for next year, and the increase of the wage, based on a policy of logical recognition of individual work performance. In fact, it seems that the percentage of workers with an average gross annual salary of less than 10 thousand euros (8.7%) is still too high, while only 26% of professionals declare annual incomes above 30 thousand euros. Similar values are decidedly very low when compared to those relating to workers’ wages in the rest of Europe.

The problem linked to precarious jobs and low wages is slowly worsening the situation of poverty in Italy, which is already very serious, and the lack of sufficient economic income is causing a growth of individuals hoping for welfare. It is estimated that in 2021, due to too low salaries, almost one in three Italians had to postpone medical care, often very important. The whole system will have to undergo functional reforms that can translate, as early as next year, into new hires and permanent contracts.

The new labor policies will have to aim at the integration between development and industry, with a unitary strategy that can strengthen the Italian production structure by directing it towards a significant technological growth and the general improvement of the conditions of human resources. Safety at work must be a fundamental requirement to strengthen the work system with the social one, so as to allow lower production costs in the face of higher recruitment capacities. Even smart working will have to undergo a necessary improvement and be updated with respect to rules and regulations, many of which were revised during the Covid19 pandemic, which already appear to be obsolete and often counterproductive.