Broken Wheels. The Italian Labour Scenario and Britain’s Migrants Issue

1 aprile 2014 15:01 0 comments

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ABSTRACT

Il Governo Renzi ha attuato lo scorso 20 marzo un decreto legge in ambito riforma del lavoro. Tale decreto nella sostanza anticipa alcune manovre previste dal Job Act, il piano di governo in materia. Che questo Atto possa essere realmente incisivo o meno per fronteggiare l’altissimo tasso di disoccupazione che affligge il Paese e far ripartire la ruota del lavoro in Italia, nessuno può dirlo. Bisogna aspettare e stare a vedere.

Tra gli osservatori nazionali ed internazionali di questa povera Italia, emerge l’attento interesse britannico. Se da un lato il Regno Unito osserva da lontano, preoccupato per le implicazioni che la disoccupazione europea sta direttamente causando sul flusso di immigrati in aumento verso la frontiera britannica, dall’altro tuttavia, attraverso lo sforzo dei propri Think Tank, Londra cerca di aiutare il Paese de “la grande bellezza” a venir fuori dalla stagnazione economica.

Da quest’ultimo punto di vista spicca l’impressionante lavoro che lo European Economics and Financial Centre di Londra sta portando avanti dal 2011. Il Centro londinese di ricerca e consulenza economico-finanziaria ha sviluppato un’accurata proposta di manovra economica volta a creare lavoro e crescita in Paesi caratterizzati dall’alto debito pubblico come l’Italia. Tale proposta, denominata Schema Buoni a Divisione del Profitto, rappresenta una misura di pronta applicazione pratica che si basa su un sistema a divisione del profitto supportato da sussidi piuttosto che su stipendi fissi. Una proposta che ha già raccolto il sostegno dei rappresentanti degli studenti universitari di alcuni atenei italiani e di diversi imprenditori, ma che per trovare piena applicazione ha bisogno della fiducia del Ministero del Lavoro.

Che l’Italia possa tornare ad essere una Repubblica fondata sul lavoro piuttosto che sulla disoccupazione, è ancora presto per dirlo. Tuttavia, grazie a strumenti come il Job Act o lo Schema Buoni a Divisione del Profitto, gli italiani possono ora provare ad aver fiducia che la ruota dell’occupazione possa tornare presto a muoversi.

 

the british perspective

© M.Marsini

 

London, Uk – The brand-new Matteo Renzi’s Italian Government last 20th March put into force a  decree concerning the Italian labour reform. Such decree is aimed to forestall some acts of the wider Government labour plan better known as Job Act. Whether this act would be incisive or not to tackle the high unemployment rate in Italy, no one can tell. We only have to wait and see.

Among all the national and international observers of this poor and sick Italy, the British approach stands out . On one side Great Britain stands by and waits, a little bit worried for the implications that European unemployment is causing the growing flow of migrants on the British boarders. On the other hand though, through the initiative of its national Think Tanks, Britain seeks to help the country of “the great beauty” to come out of its economic stagnation.

Article 1 of the Italian Republic Constitution asserts that Italy is a democratic Republic founded on labour”. Such basic principle of the Italian structure is also quoted with a big wheel in the logo of the Republic of Italy. That wheel, which has never perfectly worked since it first was put in motion, in the last few years got highly damaged and broke due to both the 2008 financial crisis and the wrong economic policies carried out in the past. The current Italian unemployment rate keeps growing and has reached 12.9% in January 2014 (source ISTAT), with a 42.4%  youth unemployment rate (January 2014, source ISTAT), the highest in the recent history of the country.

A dramatic situation which urges a recovery plan and effective measures to ensure a future to those more than 700 thousands young people without a job opportunity.

In this direction moves the Renzi’s Government Job Act, a new tool for old challenges in the labour panorama of Italy. Among the main proposals of this act we find the simplification of the employment contracts scheme, a broader social security cushion system, more transparency in the world of business and a substantial restriction on savings: from spending review to fiscal reduction on earnings. An ambitious and accurate plan which for example foresees an all-purposes benefit for those who are still looking for their first working experience or those who have lost their job (even for those who according to the current Italian unemployment benefit scheme would not have the right to receive any benefit) providing in the meantime they commit themselves to follow a compulsory professional training course and providing as well that they will not reject a working position more than once.

 

The Government is still working on this act and it will have to face the hard Parliament legal procedure before turning it into law. In the meantime the Italian Prime Minister Renzi decided to resort to quicker action and fostered a decree which was approved last week. The decree, aimed to help the Italian economy with executive acts took straight from the Job Act policy proposal, foresees, among the other measures, the chance for businesses who employ workers with a fixed-term contract, to extend it for a maximum of 8 times (instead of just one) up to a total amount of 36 months contract. «The idea on this point» explains the Minister of Labour Giuliano Poletti, «is that by doing so businesses would be able to employ in an easiest way and at the same time they will give to workers more opportunities and a chance to reach three continuing working years. In this way, at the end of the three years, the business will be more motivated to employ the worker with an open-ended contract which in addition will be even less expensive since a fixed-term contract in Italy costs 1.4% more than an open-ended one in terms of taxation».

Moreover, the decree might foresee May 2014 as the starting point of the Youth Guarantee Program of the European Commission. According to this €1.5 billion program, the Government ensures to young people, both unemployed or without a job (even those who have just finished their studies), have an opportunity of internship, training or job within 4 months from their last day of work (if unemployed) or studying (if without a job).

Such decree could eventually provide tools of immediate implementation as long as the Job Act will complete its legal procedure. Whether it would be enough, effective or adequate it is hard to say, Italian people need to wait and hope.

Who is similarly standing by and fallowing the Italian labour measures with interest is the United Kingdom. To describe to me a British perspective of oscillating thoughts between doubts and trust is His Excellency Christopher Prentice, British Ambassador in Italy, who I had the pleasure of meeting in Rome during a Charity Tea Party at Villa Wolkonsky.

«The Job Act represents one more step forward for the Italian labour reform in order to restore the national economy and provide a practical solution to the high unemployment rate. Thanks to such act people in Italy have high hopes. But they might be very careful, the real challenge is not the content of the act itself, rather how much time would it take to be put in practice and its grade of effectiveness» Ambassador Prentice says.

Furthermore, it has to be stressed that under a UK point of view the unemployment issue, in Italy as well as in Europe, in the last few months has become more and more alarming due to its implications for the flow of migrants towards the British boarders. Britain, who traditionally  has been a migrants destination from different parts of the world, is currently facing a growing number of migrant workers from poorer EU countries. In the UK half of all population growth over the last 60 years is due to immigration. Within the City of London about one in three residents was born overseas. Such scenario, combined with the too generous British welfare system, as defined by EU Commission, has made Great Britain a dynamic as well as an even more attractive society. Migrants, therefore, symbolize an important leading wheel of the UK structure and economy, a wheel which nonetheless risks to slow its movement or even break if overloaded.

As a result British Prime Minister David Cameron planned to restrict the right to benefits of EU nationals in an effort to stop vast migrations and their benefit claim related to abuse of the right to free movement in Europe. Moreover, the government is considering the possibility of auctioning visas for long-term stay in the country. A measure designed primarily to attract investments from reach countries like Russia, the Arab Kingdoms and even China.

«The reason behind such harsh approach of Mr. Cameron» explains Ambassador Prentice «is that Britain must protect its welfare system from abuse. We are not against immigration itself, of course, rather we want to avoid the illegitimate exploitation of the national unemployment benefits».

Broken Wheels

© M.Marsini

 

Nonetheless, since broken wheels have to be fixed, Britain is not only trying to find a solution to its problems concerning immigration, but, through the effort of some of its national Think Tanks, it is also trying to help Italy with the development of an effective labour recover policy. Under this point of view it stands out the remarkable work that the European Economics and Financial Centre of London is carrying on since 2011.

The London based centre of research and advice in the fields of economics and finance has developed an accurate proposal aimed at creating employment and growth in countries with high national debt such as Italy. Such proposal, named Profit Sharing Tickets Scheme, is based on a very simple system which rests on the concept of profit-sharing rather than wage. Young unemployed people commit themselves to a business’s project which will not ensure them a fixed wage, rather Profit-Sharing-Tickets that would be cashed once there are demonstrable net earnings by the project. Until the project reaches its payback though, youth receive their unemployment benefit/state assistance in order to have a subsistence amount to live on. «Concern remains about the economic prospects of countries with high national debt like Italy» asserts Professor Hannah Scobie, Director of the European Economics and Financial Centre and author of the Profit Sharing Tickets Scheme «Nevertheless, we are trying to give a practical answer to the Italian stagnation, a concrete help ready to be put in practice. An effective measure similar to those foreseen in the Renzi’s government decree and therefore equally doable. Thanks to our work in London as well as in Italy, the proposal» continues Prof. Scobie «has already won the support of Students Unions from some Italian universities (LUISS, RomaTre, University of Bari) and of several entrepreneurs (members of Confindustria and Unindustria). We just need to gain the support of politics, we are working on it with the Italian Ministry of Labour».

Whether or not Italy would come back to be a democratic Republic founded on Labour and not on unemployment, still remains hard to say. Though, thanks to tools such as the Job Act or the Profit Sharing Tickets Scheme, Italian people are now able to trust that broken wheels can be fixed.

 

Matteo Marsini

London, Uk


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