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1
WAGES AND SALARIES TRENDS IN ITALY
September the 26th, 2013 International Trade Union HouseBrussels
Dr. Lorenzo Birindelli
2
A MODEST REAL GROSS WAGES GROWTH, WITH SOME DOWNTURNS
Key concepts:• National-sectoral Collectively Agreed Wages and
salaries• Earnings (all wages items)• Inflation (CPI, Deflator)
3
Gross earnings levels in selected EU countries at constant prices. Full-time and full-year equivalent employee average in the total economy.
Private consumption expenditure deflator
20 000
22 000
24 000
26 000
28 000
30 000
32 000
34 000
36 000
38 000
40 000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
€/ye
ar a
t 20
11 p
rice
(pr
ivat
e fin
al c
onsu
mpt
ion
defla
tor)
United Kingdom Germany
France Italy
Spain
UK: 2011 average £/€ rate
SOURCE: calculations on OECD data (Dataset LFS - Average annual wages).
4
Gross earnings levels in selected OECD countries at constant prices. Average compound annual growth rates (%)
Full-time and full-year equivalent employee in the total economy.Private consumption expenditure deflator
0.0 0.5 1.0 1.5 2.0 2.5 3.0
Australia
Austria
Belgium
Canada
Denmark
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Japan
Korea
Luxembourg
Netherlands
Norway
Poland
Portugal
Slovak Republic
Slovenia*
Spain
Sweden
Switzerland
United Kingdom
United States
1993-2001
2002-2011
SOURCE: calculations on OECD data (Dataset: LFS - Average annual wages).
5
ITALY. National-sectoral Collectively Agreed Wages on Earnings Ratio (%)Gross values 1992-2012
93.0
91.8
90.9
89.490.1 90.0 89.9
89.2
88.4
87.0
86.285.8
85.4 85.7 85.686.2
85.5
86.3
85.5 85.886.2
75
80
85
90
95
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
%
National-sectoral Collectively Agreed Wages / Earnings Ratio (%)
SOURCE: calculations on ISTAT data .
6
National-sectoral Collectively Agreed Wages&Salaries Index, Earnings and Consumer Prices Index (HICP)
Yearly growth rates 1993-2014 (%)Wages and Earnings are gross and at nominal values
SOURCE: calculations on ISTAT and OECD data .
2.8
1.9
3.2
4.1
4.3
2.4
1.8 1.9
2.5
2.12.2
2.8
3.1 3.1
2.1
3.5
3.2
2.1
1.7
1.5 1.5
4.3
3.2
3.6
5.3
3.6
2.5
2.83.0
3.3
2.5
3.23.4 3.5
3.2
2.2
3.4
1.8
2.8
1.3
1.0 1.0
1.3
0.0
1.0
2.0
3.0
4.0
5.0
6.01
993
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3*
201
4*
Var
. %
National-sectoral Collectively Agreed Wages Index nominalincreases (%)Full-time Equivalent Earnings nominal increases (%)
Consumer Prices Index (HICP) increases (%)
7
The fiscal burden on labour (but also the financial base of the Italian welfare state)
Key concepts :• Tax-wedge• Social contribution on employers and employees• Personal income taxation
8
Selected EU countries. Average tax wedge (%) for a single person at 100% of average earnings with no child. Year 2001 and 2012
2001 2012Austria 46.9 48.9Belgium 56.7 56.0Denmark 43.3 38.6Finland 46.4 42.5France 50.3 50.2Germany 51.9 49.8Greece 38.2 41.9Italy 46.6 47.6Netherlands 37.4 38.6Portugal 36.4 36.7Spain 38.9 41.4Sweden 49.1 42.8United Kingdom 32.2 32.3
SOURCE: calculations on OECD data (Taxing Wages Enquiry).
9
ITALY. Comparison of standard average personal tax rates (%) for a given power purchasing parity. 2001 vs. 2013
SOURCE: author’s calculations.
2001 2013 Diff. 2013-2011
10 000€ 5.2 6.0 +0.815 000€ 13.9 14.1 +0.220 000€ 16.4 18.2 +1.725 000€ 19.8 20.5 +0.830 000€ 22.0 23.0 +0.935 000€ 24.0 25.6 +1.640 000€ 25.5 27.6 +2.045 000€ 27.0 29.1 +2.150 000€ 28.4 30.3 +2.0
10
PROGRESSING DOWNWARDS
Key concepts :• Individual income distribution• Paid and not paid time spans• Part-time
11
ITALY. Employees’ income tax returns (individuals) by taxable personal income classes at 2011 prices (%). 2001 vs. 2011 (euro per year)
00
05
10
15
20
25
―ɪ1
,5
1,5–
2
2–2,
5
2,5–
3
3–3,
5
3,5–
4
4–5
5–6
6–7,
5
7,5–
10
10–1
2
12–1
5
15–2
0
20–2
6
26–2
9
29–3
5
35–4
0
40–5
0
50–5
5
55–6
0
60–7
0
70–7
5
75–8
0
80–9
0
90–1
00
100–
120
120–
150
150–
200
olt
re 2
00
% o
f to
tal e
mp
loye
es'
inco
me
tax
retu
rns
Taxable personal income classes in thousands of € at 2011 prices
2001
2011
SOURCE: calculations on Dipartimento delle Finanze (MEF Finance Department) data.
12
THE GOOD REASONS
Key concepts:• Checking unemployment• Tackling inflation• Modest (but positive) employment quantitative
trends
13
ITALY, FRANCE AND GERMANY. Unemployment rates 1990-2014 (%)
4
5
6
7
8
9
10
11
12
13
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
UNEMPLOYMENT RATE (%)
Italy
France
Germany
SOURCE: calculations on OECD data (Dataset: Economic Outlook No 93 - June 2013 ).
14
ITALY, FRANCE AND GERMANY. Yearly Inflation rates 1990-2014 (%)
-1
0
1
2
3
4
5
6
7
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
%
Private final consumption expenditure deflator annual growth (%)
ItalyFranceGermany
SOURCE: calculations on OECD data (Dataset Economic Outlook No 93 - June 2013).
15
THE NEGATIVE SPILL-OVERS (WITH OTHERS DETERMINANTS, TOO)
Key concepts:• Low productivity (both factors) track• Low growth
16
Selected OECD countries. GDP, Employment and Multi-factor productivity Average compound annual growth rates 1993-2007 (%)
GDP at constant
ptices
Total employment
Multi-factor Productivity
Australia 3.8 2.2 1.0Belgium 2.2 0.8 0.7Canada 3.2 1.9 0.8Denmark 2.3 0.4 0.6Finland 3.6 1.0 2.1France 2.0 0.8 1.0Germany 1.5 0.3 1.1Ireland 7.0 3.9 2.4I taly 1.5 0.4 0.4Japan 1.1 0.0 0.8Korea 5.5 1.4 2.7Netherlands 2.8 1.4 1.0New Zealand 3.7 2.4 0.8Spain 3.2 3.1 0.2Sweden 3.0 0.4 1.5Switzerland 1.7 0.6 0.6United Kingdom 3.3 0.9 1.2United States 3.2 1.4 1.1
SOURCE: calculations on OECD data (Dataset Economic Outlook No 93 - June 2013; Productivity Database – update July 2013).
17
WHAT WE ARE FACING NOW
Key concepts:• Manufacturing decline• Erosion of the social expenditure financial (and
political) bases
18
ITALY. Actual (including 2013-14 estimates) and potential Gross Domestic Product at constant prices
1 000 000
1 050 000
1 100 000
1 150 000
1 200 000
1 250 000
1 300 000
1 350 000
1 400 000
1 450 000
1 500 000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Mill
ions
of €
at 2
005
pric
es
ITALY'S OUTPUT GAP
Gross Domestic Product Potential GDP
SOURCE: calculations on OECD data (Dataset Economic Outlook No 93 - June 2013).