Italy records biggest wage drop in the EU amid pandemic downturn

Italy's comparatively low pre-pandemic salaries have now fallen even further, a new report revealed.

Wages have plummeted in Italy more than any other EU country during 2020.
Wages fell in Italy by more than any other EU country in 2020. Photo: Nighthawk Shoots on Unsplash

The average salary of a full-time employee in Italy dropped more than any other EU country amid the pandemic-induced economic downturn, according to an Italian research institute.

That means that, on average, workers in Italy took home 1,724 euros less in 2020 compared to the year before, marking an overall drop of 5.8 percent in wages.

The EU salary average also declined, but much less steeply, recording a drop of 1.2 percent. The eurozone instead noted a 1.6 percent reduction in earnings.

READ ALSO: Italy loses almost one million jobs in a year to the coronavirus crisis

The report highlighted Italy’s large number of workers on part-time and short-term contracts and noted how this impacts the country economically.

There are currently around 3 million temporary workers and 2.7 million ‘involuntary’ part-timers, which means those who work part-time not by choice, the data showed.

The percentage of involuntary part-time workers in Italy is the highest at European level, with two-thirds (66.2 percent) of the total number of workers in Italy employed in this way. This is much higher than the eurozone average of 24.7 percent.

Photo: Vincenzo PINTO/AFP

Overall, the number of people employed part time in Italy and the number of hours worked is around the European average.

The study pointed out that short-term contracts should, in theory, be a way to fill gaps temporarily but are in many cases often assigned to those with “low qualifications”.

Italian part-time wages are also more than 10 percent lower than the average in the EU.

Even before the economic slump caused by the pandemic, in Italy in 2019, around five million people earned under 10,000 euros gross per year, the study found.

SURVEY: Foreign residents rank Italy one of ‘worst countries in world’ for finances and working abroad

The institute also calculated what it claims are the ‘true’ figures of unemployment in Italy, which for 2020 stands at 14.5 percent compared to the official figure of 9.2 percent.

That corresponds to almost four million more unemployed people than the recorded 2.3 million, making the number of people out of work in Italy at over six million, according to the research firm’s estimates.

“It is clear that the issue of work concerns the quantity of employment but also many aspects of its quality,” the organisation’s president, Fulvio Fammoni, told reporters.

Referring to the government’s plans for the 2022 Budget, he indicated that the question should be how much these funds solve Italy’s fundamental problems, rather than simply how to use them up.

Their findings also looked at the work market in the previous decade, which revealed that between 2010 and 2019, average earnings in Germany increased by 5,430 euros per year compared to Italy’s decline of 596 euros annually.

EXPLAINED: What changes in Italy’s new budget?

Italy also records some of the longest working hours, while productivity lags behind the EU average – including behind other major economies such as Germany, France and Spain.

Foreign nationals who move to Italy have also reported problems with pay and working conditions, with those moving to Italy less satisfied with their financial situation than in any other country, a 2021 survey found.

A third of foreign residents in Italy said their disposable household income is not enough to cover their expenses.

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Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.