The Italian Jobs Act: Policy Design vs Political Perceptions - - PowerPoint PPT Presentation

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The Italian Jobs Act: Policy Design vs Political Perceptions - - PowerPoint PPT Presentation

Nov 12, 2022 416 likes •682 views

The Italian Jobs Act: Policy Design vs Political Perceptions TOMMASO NANNICINI PSE June 7, 2019 Main (policy) steps Poletti Decree (Law 78/2014): liberalization of fixed-term contracts Budget law (Law 190/2014): elimination of

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SLIDE 1

The Italian Jobs Act: Policy Design vs Political Perceptions

TOMMASO NANNICINI

PSE – June 7, 2019

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SLIDE 2

Main (policy) steps

  • «Poletti Decree» (Law 78/2014): liberalization of fixed-term

contracts

  • Budget law (Law 190/2014): elimination of social security

contributions for the next three years (up to a yearly cap of 8,060 euros) on new hires during 2015

  • «Jobs Act»: delegation law in December 2014 (Law 183/2014)
  • First enforcing decrees (approved on December 24, 2014):

 New open-ended contracts with «increasing protection»  smaller firing costs and reduced judicial uncertainty (new hires only)  Reform of unemployment benefits  increased duration/coverage

  • Second set of enforcing decrees (all by September 2015):

 Simplification of contract types & labor code  Internal flexibility (tasks) & smart working  Active labor market policies  Reform of temporary lay-off / wage supplementation schemes (CIG)

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SLIDE 3

Main (policy) goals

  • No jobs creation but reduction in labor market duality &

increased productivity via human capital investment

– No more flexibility «at the margin»  reduced separation costs on standard contracts (for low seniority) & restraints on atypical contracts – From «job property» to «flexsecurity»  enhanced income protection and employment services for the unemployed – Lower tax wedge on permanent employment (cyclical or structural?)

  • In God we trust, all the others must bring data…

– Share of new hires with open-ended contracts ↑ – Duration of individual spells toward career stability ↓ – Labor court litigation ↓

  • Evaluation of the reform in the long run deemed to be crucial
  • In the short run, also crucial to monitor:

– Labor mobility from old to new permanent contracts – Balance between individual and collective dismissals

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SLIDE 4

10 20 30 40 50 60

Youth Unemployment (age 15-24)

2008 2014

Source: Eurostat

Youth unemployment

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SLIDE 5

Disproportionate drop in open-ended contracts among the youth during the crisis

60 65 70 75 80 85 90 95 100 105 T4-2007 T2-2008 T4-2008 T2-2009 T4-2009 T2-2010 T4-2010 T2-2011 T4-2011 T2-2012 T4-2012 T2-2013 T4-2013 T2-2014 T4-2014 Total employment Open-end employment (age 15-34)

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SLIDE 6

Source: Eurostat

Dual labor market correctly assessed: % temp workers in Italy is misleading…

0.0 5.0 10.0 15.0 20.0 25.0 30.0

Romania Lithuania Estonia Latvia Bulgaria United Kingdom Malta Norway Luxembourg Denmark Belgium Slovakia Austria Ireland Czech Republic Hungary Greece Germany Switzerland Iceland Italy EU28 EA17 Finland France Slovenia Croatia Sweden Cyprus Portugal Netherlands Spain Poland

2008 2011 2014

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SLIDE 7

… because of large share of self employed in total workforce

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% Germany France Spain Italy

2014

Higher (tertiary) education Upper secondary education Lower education

Source: LFS Eurostat

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SLIDE 8

The policy design at a glance

  • Job property
  • Employment protection
  • Dual labor market
  • Flexibility at the margin:

temporary contracts and self-employment as entry gate to job market

  • Unemployment support

segmented and biased

  • Training on-the-job only
  • Liability rule
  • Workers’ protection
  • Protected flexibility
  • Permanent contract with

increasing protection + restraints on atypical work

  • Larger unemployment

benefits + minimum income

  • Enhance training off and
  • n-the-job
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SLIDE 9

Individual dismissals

  • Fixed separation costs (increasing with seniority/tenure)
  • Fast-track settlement: compensation offered to the employee

is equal to 1 gross monthly salary per year of tenure (min 2 max 18); if the employee accepts issue is settled, else court

  • In any case the firm pays a small share of unemployment

benefits (now) and of active policies (tomorrow?)

  • Unfair dismissals: 2 gross monthly salaries per year of tenure

(min 4 max 24), but amount is fixed by the law

  • Reinstatement only remains for discriminatory dismissals and

for non-existing breach of conduct

  • Foreign benchmarks: Germany (Section 1a TPA 2004), France

(«rupture conventionnelle»)

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SLIDE 10

Status-quo unfair dismissal (plus reinstatement)

2 4 6 8 10 12 14 16 18 20 22 24 26 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30

Unfair dismissal Fast-track settlement

Compensation in Monthly Salary Years on-the-job

Permanent contract with increasing protection /1

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SLIDE 11

2 4 6 8 10 12 14 16 18 20 22 24 26

2 4 6 8 10 12 14 16 18 20 22 24 26 28 30

After Constitutional Court Ruling unfair dismissal

Unfair dismissal Fast-track settlement

Permanent contract with increasing protection /2

Years on-the-job Compensation in Monthly Salary Pre Jobs Act unfair dismissal (plus reinstatement)

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SLIDE 12

Why applying the new dismissal rules to new hires only?

  • Critique: transition may be slow, risk new dualism?
  • Slow transition: unlikely
  • Fact: seniority on-the-job in firms >15 employees

before reform?

18.0 17.0 15.0 10.0 12.0 14.0 6.0 8.0

5 10 15 20 < 2 2-3 4-5 6-7 8-10 11-15 16-20 > 20

% Years

50% permanent employees < 5 yrs

  • n-the-job
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SLIDE 13

Employment trends

13600 13800 14000 14200 14400 14600 14800 15000 15200

Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18

Open-ended employment (Thousands)

Great Recession (in Italy)

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SLIDE 14

Income protection schemes

  • Bringing back short time work schemes (cassa integrazione)

to their original function

– Temporary support, i.e., only for a TOTAL of 2 years – Closing the “CIG by way of derogation” – Universal coverage for all firms (new funds for small firms)

  • Widening the unemployment benefits and making them

proportional to contributions: NASPI (2.2 billions of euros)

– Max duration from 18 months (above 55) and 12 months (below 55) to 24 months for everybody – Duration proportional to contributions paid in the last 4 years – Max amount of the subsidy increased too

  • Minimum income scheme (ASDI and then REI – Reddito di

Inclusione): means-tested and conditional anti-poverty measure (2.7 billions of euros)

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SLIDE 15

Unemployment benefits

ASpI e min-ASpI nuova ASpI

Weeks of contributions Months of subsidies

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SLIDE 16

Unemployment benefits: an international comparison

16

Italy Germany Spain DK France Duration rule (weeks of duration:weeks

  • f contribution)

1:2 1:2 1:3

  • 1:1

Maximum duration (months) 24 Depends upon age 24 24 Depends upon age <50 12 24 50-55 15 36 55-58 18 36 >58 24 36 Replacement rate (first month) 75% gross wage up to 1195€, then 25% 60% net wage 70% gross wage 90% gross wage 40% of wage + €11,76 a day; or 57%

  • f wage

within 75%

  • f wage
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SLIDE 17

Active labor market policies

  • National agency in charge of:

– Setting the rules of the game for all areas of the country – Defining employment services standards – Checking on compliance with the standards

  • Public and private services need to be complementary, and

actually to compete between them

  • Quasi-market: payment of (public or private) agency services
  • nly upon re-employment of workers
  • Interplay between active and passive policies:

– After dismissal, the unemployed receive a voucher to be spent in active policies – Conditionality on receiving passive help

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SLIDE 18

A “Gorbachev” reform

  • Loved abroad, not so much within the country
  • Deliberate choice of political strategy (at some point…) to

convince:

– EU partners – Foreign investors

  • But also moderate voters…

– “New Left” and struggle with trade unions – The importance of political “symbols” (Article 18)

  • Political capital depreciation
  • What happened to the reform?

– Fierce critique but no big changes by new populist government – Constitutional Court ruling

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SLIDE 19

Quando si parla di riforma del lavoro si cita spesso l'articolo 18? Lei sa cosa prevede questo articolo di legge?

3

53% 47%

No Sì

Sondaggio realizzato da Ipsos PA per il Corriere della Sera del 28 settembre 2014

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SLIDE 20

Secondo lei oggi quanti lavoratori sono tutelati dall'articolo 18 in Italia?

(Base: totale intervistati)

7

2% 8% 12% 17% 4% 53%

Tutti La maggior parte Circa la metà Una parte minoritaria Nessuno di fatto Non sa Non conosce i contenuti dell'articolo 18

Sondaggio realizzato da Ipsos PA per il Corriere della Sera del 28 settembre 2014

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SLIDE 21

Nel complesso lei definirebbe questa riforma del lavoro…?

11

16% 28% 3% 20% 33%

vantaggiosa per le imprese, ma non per i lavoratori vantaggiosa per i lavoratori, ma non per le imprese svantaggiosa per tutti non conosce la riforma

Sondaggio realizzato da Ipsos PA per il Corriere della Sera del 23 novembre 2014

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SLIDE 22

E’ meglio che alla fine nei casi di licenziamento per motivi disciplinari...

12

63% 26% 11%

resti un obbligo di reintegro del lavoratore, se non vi è stata una giusta causa si prevedano forme di indennizzo economico non sa

Sondaggio realizzato da Ipsos PA per il Corriere della Sera del 23 novembre 2014

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SLIDE 23

Nei giorni scorsi c’è stato un botta e risposta fra Renzi e Camusso sui diritti dei

  • lavoratori. In generale chi ha più ragione?

16

Sondaggio realizzato da Ipsos PA per il Corriere della Sera del 28 settembre 2014

47% 20% 24% 9%

Il premier Renzi, perché i sindacati difendono i diritti di pochi, mentre la proposta del governo aumenta i diritti di chi adesso non è garantito Il segretario della Cgil Camusso, perché il governo vuole ridurre in maniera sbagliata i diritti dei lavoratori Nessuno dei due Non sa, non indica

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SLIDE 24

Riferendosi alla rottura interna al PD sui temi del lavoro, Renzi ha dichiarato: “Se qualcuno dei nostri vuole andare con la sinistra radicale, in nome della purezza delle origini, faccia pure». Lei condivide questa dichiarazione?

17

62% 32% 6%

sì: sul lavoro bisogna agire subito e chi non è d'accordo deve farsi da parte no: un politico di livello non liquida così dei problemi complessi non sa

Sondaggio realizzato da Ipsos PA per il diMartedì

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SLIDE 25

Riguardo invece agli scioperi contro la politica del Governo in tema di economia e lavoro, Renzi ha dichiarato: “Sono finiti i tempi in cui un corteo faceva cadere un Governo”. Secondo lei Renzi….

20

Sondaggio realizzato da Ipsos PA per il diMartedì

48% 47% 5%

fa bene: i tempi sono cambiati e i sindacati devono capirlo fa male: il Governo dovrebbe cercare di evitare scioperi che sono un costo per il paese, senza polemizzare non sa

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SLIDE 26

Di fronte alle tensioni di piazza, secondo lei Renzi dovrebbe…

19

Sondaggio realizzato da Ipsos PA per il diMartedì

73% 26% 1%

aprire un dialogo con chi manifesta andare avanti senza preoccuparsene non sa