Italy’s labor market: reforms urgently needed

Italy has the third highest unemployment rate in the EU at 10.5 percent – despite the fact that there was a layoff freeze during the pandemic that saved an estimated 330,000 jobs. Now it is up to the government.

Protests in Florence: three men carry a banner. It says “Insorgiamo”, “We rebel”. The British auto supplier GKN has fired more than 400 workers – by email. One of the protesters explains: “At this moment we are only asking to be allowed to work. Nothing else.” Almost 500 kilometers south, in Naples, men and women are also going to the barricades. The American company Whirlpool closes its plant; it is not profitable, it is said to justify. More than 300 employees are affected.

The problems have been the same for decades

After a month-long ban on dismissal due to the corona pandemic, layoffs have been possible again in Italy since July 1. Nothing has changed in the general situation in the country, said the president of the national social insurance institution INPS, Pasquale Tridico. “Italy has always had the problems: a strong north-south dualism with a south that has much higher unemployment figures than the north, which can reach up to 20 percent. Employment for women in the south is also very low,” he explains.

In addition, there is a high proportion of illegal work in southern Italy, which affects around three to three and a half million workers. And: “There is also a gap between north and south in terms of infrastructure.”

The boys in particular are hit hard; they just lost their jobs during the pandemic. Youth unemployment is almost 32 percent. And if someone has a job, it is often only temporary or part-time. On the other hand, many are turning their backs on their homeland, says Tridico. “There is a kind of ‘mismatching’ on the Italian job market – especially when it comes to young people. They leave because they don’t get the same opportunities here.” Another problem: only every second woman in Italy is employed, and the situation has worsened during the pandemic.

Draghi wants to initiate reforms

The government under Prime Minister Mario Draghi now wants to use a lot of money from the European Recovery Fund to reform the labor market and, for example, promote special jobs for young people or invest in better education at universities. There was help from the state especially during the corona pandemic – from grants and bonuses to short-time work benefits, which often came much too late. At the moment it doesn’t play a big role anymore, says Tridico. “Above all, the short-time work is not continuous. There are periods of time, months,” he says. Compared to last year, the need for short-time work is very low, it is only around 20 percent. “Last year there were moments with 67 to 70 percent.”

All hope is now directed towards the economy, which is already really getting going again. The prospects for next year are good, the EU Commission is expecting growth of 4.2 percent. In addition, longstanding structural problems are being addressed, such as a sluggish judiciary. And the people who have been given notice are also hoping for help from their country – like the demonstrator in Florence: “If Italy no longer supports the workers, it will be over.”