The The cost of living is falling, but remains a drain on salaries, which are not keeping pace, significantly reducing purchasing power. With the measure we want to help those who are most in trouble, but the government has erected a wall on the minimum wage and more than half of workers are waiting for the extension of the national labor contract to get an increase.
How much has inflation weighed on the Italians’ wallets and is it still weighing on them? We see it firsthand every day: with the same money in our pockets as one, two, three years ago, we can buy fewer things. Because while prices are rising, salaries have remained the same, or increased less than the cost of living.
The high cost of living has eroded purchasing power
By the end of last year, the OECD told us, real wages in Italy had fallen by 7 percent compared to before the outbreak of the pandemic. Simply put, it means that on a salary of 1,500 euros per month, more than 100 euros in purchasing power has been lost: the amount on the pay slip has remained the same, but inflation has reduced its value.
More than half of employees are waiting for their contract to be extended
Things don’t get much better if we look at contractual wages, that is to say the wages set out in national agreements. They have increased in the first six months of this year – Istat explains – but remain below 6 percentage points compared to the cost of living. These are the table wages, drawn up by agreements between companies and trade unions and which do not take into account extraordinary items, but which do represent an important index because more than half of employees have a contract that has expired for more than two years and are therefore waiting for an increase.
The anti-inflation measures in the budget
Adjusting these contracts is crucial, but not sufficient. The unions are also calling for a reduction in taxes and premiums that employees pay. With this maneuver, the government aims to maintain the reduction of the tax wedge, and is also considering a lighter tax on middle-income earners with a remodulation of personal income tax and reductions for those most in trouble. Bonuses, such as those on gas and bills, that made it possible to maintain families’ bills, but some of them have already disappeared.
Minimum wage, the government says no
However, when it comes to the minimum wage, Palazzo Chigi has built a wall. Legislating a wage of at least 9 euros gross per hour, as proposed by the opposition, would benefit more than four and a half million Italians (if we do not include the thirteenth salary and severance pay). An army made up of agricultural workers, domestic workers and caretakers, but also many employees of companies where the minimum conditions of the agreements are not respected or where they are hired with a ‘pirate contract’, i.e. signed by unrepresentative organizations and with starvation wages.
Source: TG 24 Sky
I am Lawrence Sickels and I work in the news industry. For the past few years, I have been writing for The News Dept, a web-based platform dedicated to providing readers with quality journalism. My main area of focus is covering economic news and business trends across the globe.
