Bericht

An Italian job: The need for collective wage bargaining reform

Since the mid-1990s, Italy has been characterised by a lack of labour productivity growth, combined with a 60 percent growth in labour costs, 20 percentage points above euro-area average consumer price growth. As a consequence, Italy has become less competitive compared to its euro-area partners, the profitability of its firms has dropped and real GDP-per-capita has flatlined. At the root of the substantial discrepancy between wages and productivity is Italy's current system of centralised wage bargaining which, in many ways, is designed without regard for the underlying industrial structure and geographical heterogeneity of the Italian economy. This has fostered perverse incentives and imbalances within Italy. Collective wage bargaining, and in particular the determination of base salaries, should be moved from the national to the regional level for all contracts, in the public and private sectors. The Mezzogiorno, which might superficially be seen as losing out from this policy, would actually gain the most in competitiveness terms. Furthermore, measures should be taken so that, in the long run, the Italian industrial structure evolves into a less fragmented small-company-based economy. This firm consolidation would likely expand the use of firm-level agreements and performance payments, and would improve Italy's productivity and competitiveness overall.

Language
Englisch

Bibliographic citation
Series: Bruegel Policy Contribution ; No. 2016/11

Classification
Wirtschaft

Event
Geistige Schöpfung
(who)
Terzi, Alessio
Event
Veröffentlichung
(who)
Bruegel
(where)
Brussels
(when)
2016

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Bericht

Associated

  • Terzi, Alessio
  • Bruegel

Time of origin

  • 2016

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