Thematic feature - unskilled workers

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This article gives a brief overview of the industrial relations aspects of the topic of unskilled workers and unskilled work in Italy, as of February 2005. It looks at: national definitions of unskilled workers or work; the number of unskilled workers and workers in unskilled jobs, and the extent of unskilled work; employment and unemployment among unskilled workers; the regulatory framework; trade union organisation among unskilled workers; pay and conditions; recent initiatives to improve the situation of unskilled workers; and the views of trade unions and employers' organisations on the issue and its implications for collective bargaining.

In recent years, labour market developments have altered the demand for labour. Increasingly, employers are looking for adaptable workers, with more 'transversal' and 'relational' competences. The nature of skills required to be considered efficient in a job has thus evolved. In this situation, there is a growing risk of exclusion among unemployed workers whose profiles do not match the job characteristics needed, while the low-skilled or unskilled workforce is more at risk of unemployment.

In this context, in February 2005 the EIRO national centres were asked, in response to a questionnaire, to give a brief overview of the industrial relations aspects of the topic of unskilled workers. The following distinctions are used, where applicable:

(a) an unskilled job is a job which requires, for its proper execution, hardly any formal education and/or training and/or experience;

(b) a worker in an unskilled job is a worker doing such a job, irrespective of their level of qualifications or competences (especially under conditions of high unemployment, a significant share of those occupying unskilled jobs may be 'overeducated' for them, or 'underemployed'); and

(c) an unskilled worker is someone who has only the lowest level of qualifications or education (however defined).

The questionnaire examined: national definitions of unskilled workers or work, including those used or provided in laws, statistics or collective agreements; figures or estimates on the number of unskilled workers and workers in unskilled jobs, and the extent of unskilled work; employment and unemployment among unskilled workers; the regulatory framework, including any specific laws or collective agreements, and trade union organisation among unskilled workers; the pay and conditions of unskilled workers and workers in unskilled jobs, or for unskilled jobs; any recent initiatives to improve the situation of unskilled workers; and the views of trade unions and employers' organisations on the issue and its implications for collective bargaining. The Italian responses are set out below (along with the questions asked).

Definitions and extent

(a) Please provide a definition of unskilled workers or work (see distinctions above) in your country. Are there any definitions provided in laws, statistics or collective agreements?

In Italy, the category of 'unskilled workers' is considered to comprise all workers with low or nil vocational skills.

The National Statistics Institute (Istituto nazionale di statistica, Istat) uses the International Standard Classification of Occupations ISCO 88 for its labour force surveys. Workers are divided into four 'macro' groups according to occupational skills: high-skilled white-collar workers (intermediate occupations, highly specialised occupations, legislators, senior managers and entrepreneurs); low-skilled white collar workers (sales and household services occupations, office and customer contact occupations); high-skilled blue-collar workers (artisans, skilled workers and farmers); and low-skilled blue collar workers (unskilled workers in administration, education and the health service, in sales and other services; in manufacturing, plant and machinery operators, operators of fixed machinery or of vehicles, mobile and hoisting machinery, and farmworkers).

Job classification levels - which are used to define jobs for the purpose of determining pay and conditions - are among the key elements in sectoral collective agreements and are subject to bargaining. The classification of personnel in agreements varies according to the sector: in general, low-skilled or unskilled workers are defined as those performing jobs and operations the require generic vocational knowledge and practical abilities.

(b) Are there any figures or estimates available on the number of unskilled workers and workers in unskilled jobs, and the extent of unskilled work. How have these figures changed in recent years - have changing skill needs or improvements in education/training systems led to a reduction in the numbers of unskilled jobs, unskilled workers and workers in unskilled jobs? Please break all figures down by gender where possible.

Istat reports that, during the 1990s, active labour market policies and changes in productive sectors intensified the 'upskilling' of 'human capital'. The combination of various factors - on the one hand, the adjustment of labour demand to the diffusion of technological innovation and greater competition in international markets, and on the other, incentives for training schemes to raise skills levels - altered vocational categories in favour of more highly-skilled workers (according to the Istat annual report for 2003). In the second half of the 1990s, these changes led to increases in employment levels especially as regards highly-skilled occupations in the services sector.

Since 2000, however, a slowdown of economic growth has had significant effects on the labour market:

• entries into more highly-skilled occupations have diminished; and

• female employment has increased.

According to Istat’s analysis of employment dynamics and the quality of work, in 2003 the occupational composition of Italy’s various productive sectors changed, with lower-skilled jobs becoming more widely available. In services, the growth of high-skilled occupations slowed down, whilst there was an increase in employment in'intermediate' occupations (in administration, commerce, finance and insurance), and in those connected with sales and household services. White-collar workers represented 62% of employment in the entire economy (the average total number of people in employment was 22,054,000 in 2003). White-collar positions made up 81% of employment in the services sector and 30% in manufacturing. Blue-collar workers made up 38% of the total labour force; the share of high-skilled blue-collar workers (20.4%) was not significantly different from that of low-skilled ones (17.5%).

In 2003, 225,000 new jobs were created which were taken by people with university or upper-secondary school qualifications who replaced personnel with lower-secondary or elementary school qualifications. Of these, 129,000 were filled by women - an increase of 1.6% compared with 2.2% in 2002 - while 96,000 were taken by men - an increase of 0.7% compared with 1% in 2002. Despite the abovementioned decrease in entries to the higher-skilled occupations in 2003, turnover was nevertheless considerable: among the employed there were 595,000 more people with higher-level educational qualifications (340,000 men and 255,000 women) and 370,000 fewer with low-level educational qualifications (244,000 men and 126,000 women).

As regards the distribution of jobs according to the duration of employment contracts, there were 14,464,000 workers with open-ended employment relationships in 2003, which was an increase of 178,000 on 2002. In 2003, there were 1,583,000 workers on fixed-term contracts, which was an increase of 20,000 on the previous year, and they represented 9.9% of the total labour force.

A survey conducted by Istat over the five-year period 1995-2000 highlighted nine growing occupational groups, of which eight were white-collar and one was low-skilled blue-collar. Overall, the report showed far-reaching change in the Italian productive system, with a marked 'tertiarisation' of sectors. These tendencies continued over 2000-3: the number of growing occupational groups was similar (10 new groups, of which nine white-collar and one low-skilled blue-collar), but with a composition different from that of the previous period. In particular 2000-3, was marked by:

• a slowdown in the growth of employment in the health service, education and household services;

• an increase in employment on low-skilled occupations in commerce and tourism. In these sectors, forms of 'atypical' employment (part-time and fixed-term contracts) increased more than in the rest of the economy;

• in both 1995-2000 and 2000-3, high-skilled professional staff was the group that grew most, in both gross and net terms (18.8% and 10.8% respectively). Workers in this category are mostly self-employed, with university qualifications, male and occupied in private and marketable services sectors; and

• a significant growth (9%) in unskilled personnel in sales and other services, which reversed the trend of the previous period. Workers in this category belonged to all age groups over 34, the majority had low educational qualifications (lower-secondary or elementary) and were mainly women or employed on part-time and short-term contracts.

Moreover, over 2000-2003 employment relationships in the growing occupations were very frequently regulated by open-ended part-time contracts. However, the greatest amount of part-time employment was among unskilled personnel in the commerce and services sectors, mainly on fixed-term contracts.

The 1995-2000 and 2000-3 periods therefore did not differ significantly in terms of growing occupations. However, the trends outlined above indicate a change in the Italian labour market taking the form of greater polarisation between highly specialised occupations and unskilled occupations and a constant increase in flexible forms of employment.

(c) Please provide figures on employment and unemployment rates for unskilled workers, compared with higher-skilled groups. Have unskilled workers/workers in unskilled jobs been particularly affected by industrial and company restructuring? Have new jobs created in recent years been filled by unskilled workers? Please break all figures down by gender where possible.

2003 saw a 3.9% fall in unemployment 'in the strict sense' (unemployment is divided into various components in Italy), from 873,000 people to 782,000. The number of first-time job-seekers decreased by 3.4% (from 873,000 to 843,000) and other job-seekers by 1.2% (from 477,000 to 471,000). As regards the educational qualifications of all job-seekers, the figures for 2003 were as follows:

• 233,000 (11% of the total) people without qualifications or with only an elementary certificate;

• 856,000 (41%) with a lower-secondary school certificate;

• 833,000 (40%) with an upper-secondary school certificate; and

• 174,000 (8%) with a university degree or diploma.

The average unemployment rate for the country as a whole was 8.7% (the male unemployment rate was 6.8%, while the female rate fell from 12.2% in 2002 to 11.6% in 2003, according to Istat figures). In the period immediately after the conclusion of education, in 2003 the unemployment rate of young people varied depending on the level of education: 34% of young people aged 15-19 with a lower-secondary school certificate; 25% of young people aged 20-24 with an upper-secondary school certificate; and 20% of young people aged 25-29 with a university degree. The youth unemployment rate fell, but with significant differences. Young people aged between 25 and 29 recorded the largest decrease in unemployment: from 15% in 2002 to 14.3% in 2003. By contrast, the unemployment rate among young people aged between 15 and 19 rose by 0.5%. This therefore continued the trend already apparent in 2002 of particularly high levels of unemployment among young people aged under 19 and possessing at most a lower-secondary school certificate. According to a survey conducted by the Institute for the Development of Vocational Training (Istituto per lo sviluppo della formazione professionale dei lavoratori, Isfol), these figures show that possession of a vocational qualification or an upper-secondary school qualification is one of the main variables in reducing the unemployment rate. Comparison between the 2002 and 2003 unemployment rates shows a polarisation between: easier work entry for older people with medium-to-high qualifications and persistent unemployment among younger people with medium-to-low qualifications.

Regulation and conditions

(a) Is there a specific regulatory framework in your country concerning unskilled workers and workers in unskilled jobs (however defined)? Are there specific laws or collective agreements? Are there specific trade union organisations for them, or are they represented in 'normal' union structures. Have there been any changes in these area reflecting the changes referred to in question (b) under 'Definitions and extent' above?

In Italy, the employment conditions of low-skilled or unskilled workers are regulated, like those of other worker, by collective bargaining at two levels - central (national/sectoral) and decentralised (territorial or in-company).

The sectoral trade unions represent all workers employed in a particular sector, independently of their jobs or skill levels.

(b) Please provide any figures available for the pay of unskilled workers and workers in unskilled jobs, or for unskilled jobs, and the relationship of this pay with the average or with higher-skilled groups. Do collective agreements contain specific pay grades for unskilled workers, or workers in unskilled jobs? Please break all figures down by gender where possible.

The national tripartite agreement of 23 July 1993 (IT9709212F) aims to keep national-level sectoral pay bargaining within the parameters of the planned inflation rate, in the framework of an incomes policy. In order to safeguard the purchasing power of wages, the 1993 agreement states that at the end of the each two-year pay bargaining cycle, sectoral bargaining establishes the extent to which any shortfall in the two previous years between the predicted inflation rate and the real inflation rate is to be recouped. Besides stabilising wage dynamics for anti-inflationary purposes, the 1993 agreement also regulates how company-level bargaining may determine pay rates - increases decided at this level must be linked to company performance.

Implementation of this system of rules has guaranteed a minimum wage increase for all workers (the increase decided at national sectoral level for each category), whilst over the years wage differentials have arisen between workers who have benefited from company-level bargaining and those who have not participated in this distribution of company productivity gains. In practice, decentralised bargaining (especially at company level) covers no more than 40% of all workers. Moreover, the coverage of this second-level bargaining increases with the income of workers, among other reasons because it takes place mainly in large companies (with more than 500 employees), which, other conditions being equal, pay higher wages than smaller firms do. Lower-paid workers, often employed by smaller-sized firms, are consequently often unable to benefit from productivity increases at the firm for which they work.

Given the above, larger firms are thus the part of the Italian productive system where it can be assessed whether the pay targets set by the 1993 agreement have been fulfilled. A survey by Istat has examined, separately for blue-collar and white-collar workers, the average pay per hour and the pay structure for the period 2000-3. In 2003, average pay per hour for white-collar workers in large firms was lower in 'marketable' services (98.1 compared to an average value of 100) than in manufacturing (104.8). In this latter sector, workers in the chemicals industry received the highest pay, and textiles workers the lowest (respectively 116.8 and 82.7). The range of variation was greatest in marketable services, with around 66 percentage points between the pay received by white-collar workers in banking services (136.7) and those in commerce (70.8). The former have always enjoyed higher pay scales, while many of the latter are low-skilled and poorly paid. Among blue-collar workers, the highest wages are paid in the electricity, gas and water sector (141.1), where workers still benefit from a market in which there is little competition. By contrast, in hotels and restaurants, which have always been highly labour-intensive activities, workers receive lower pay (33.2% below the average). While in manufacturing only textiles and metalworking earn below-average wages (respectively 82.8% and 98.8%); in services, by contrast, workers in transport and communications are paid above the average level (110.4).

In general, analysis of pay differentials between blue-collar and white-collar workers has shown that the pay of the former is around one-third less than that of the latter. Between 2000 and 2003, skill-level differentials increased the advantage of white-collar workers: overall, it increased by 3.2% among office workers, 2.7% in industry and 5.3% in marketable services. At sector level, skill-level differentials significantly increased in commerce and professional and business services, while in the hotel, restaurant, transport and communications sectors the gap diminished.

(c) Are there any differences between unskilled workers/workers in unskilled jobs and higher-skilled groups in terms of access to other benefits, social security, pensions, etc? Please break all figures down by gender where possible.

Industry-wide collective agreements contain unified regulations on the employment conditions of employees in the sector, regardless of skill levels, and guarantee minimum levels of treatment.

Although detailed figures are not available, one may presume that higher-skilled workers have greater access to benefits. In general, however, as pointed out above, the benefits deriving from second-level bargaining (at territorial or company level) accrue to all workers.

Actions and views

(a) Please describe any recent initiatives taken jointly or separately by companies, public authorities (national or local) or the social partners (eg collective agreements) to address the situation and improve the situation of unskilled workers in terms of pay, working conditions, training, employability, unemployment etc.

The main initiatives taken by the government and the social partners in this area concern measures to provide skilling and continuing vocational training courses for all workers, but especially low-skilled ones. According to a survey by Isfol, 72,300 vocational training courses were organised in 2002-3, which was 26,600 more than in the previous year. Overall, 3.8% of the labour force received vocational training. The degree of coverage varied according to the category concerned: 39.1% of young workers received training, employed adults 1.8%, and unemployed adults 6.7%.

One of the main instruments available to support the training of dependent employees are the intersectoral continuing training funds (Fondi paritetici interprofessionali, IT0202103F) provided for by law and promoted jointly by the main employers’ associations and trade unions. The first 10 funds were set up in 2003, and employers must allocate 0.30% of the social security contributions paid to the National Institute for Social Insurance (Istituto nazionale di previdenza sociale, Inps), the so-called compulsory contribution for involuntary unemployment (contributo obbligatorio per la disoccupazione involontaria), to workforce training. The common objective of the funds is to promote and finance vocational training programmes at company level - for individual enterprises or for groups where there has been an agreement between the social partners to that effect - and at territorial, sectoral and regional levels. The funds may also finance vocational training programmes that involve workers in enterprises operating in more than one region or on a national scale. By the end of 2003, around 7.3% of firms (employing 41% of dependent employees) had joined the scheme. The geographical distribution of participation is still overbalanced towards the North and Centre of Italy.

At the beginning of 2004, the main employers’ associations, except for the artisanal confederations, and the General Confederation of Italian Workers (Confederazione generale italiana del lavoro, Cgil), the Italian Confederation of Workers' Unions (Confederazione italiana sindacati lavoratori, Cisl) and the Union of Italian Workers (Unione italiana del lavoro, Uil) signed a national multi-industry agreement (Accordo interconfederale per la disciplina transitoria per i contratti di inserimento) to regulate the use of the 'work-entry contract' introduced by a recent law reforming the labour market (IT0307204F), which replaced the former work/training contract. This agreement allows the immediate use of a new type of work contract intended to encourage the hiring of workers belonging to the so-called 'weak categories' (unemployed workers aged over 50, women resident in areas of high female unemployment, and people with severe disabilities) and improve the range of protection for workers. More specifically, work integration programmes must comprise a minimum number of hours of theoretical training and specific instruction in order to enhance skills already possessed, and the contents of contracts must be specified in writing.

At territorial level, in order to deal with increasingly frequent processes of reorganisation and relocation of manufacturing firms in North-Eastern Italy, local authorities and the social partners have promoted the organisation of reskilling and training courses for workers involved in restructuring plans, support and counselling services, and more generally services intended to enhance local 'human capital', seeking to reconcile the economic needs of firms with the personal needs of workers (IT0501206F).

(b) Please summarise the views of trade unions and employers’ organisations on the issue and its implications for collective bargaining.

In the last months of 2004 and in early 2005, the main trade unions and employers’ associations sought to engage in constructive dialogue with the government to find shared solutions for the problem of the diminishing competitiveness of more and more sectors of the Italian productive system (IT0503104F). The social partners have drawn up a strategic plan for competitiveness that would direct the resources available to areas such as innovation, research and training, focusing on those sectors that are already examples of excellence in European industry and business. According to the employers’ associations and trade unions, if Italy is to be competitive in international markets, it is necessary not only to reduce labour costs but also to invest in the quality of work, without which growth will be impossible.

From this point of view, the main employers’ associations have welcomed the introduction of new types of contracts that maximise the flexibility of labour supply. However, they also maintain that action must be taken in other areas as well in order to improve and strengthen workforce skills. More extensive and more efficient training schemes throughout working life, and an educational system that more closely reflects the new needs of the economic system, are the priorities set by the employers’ associations.

The Cgil, Cisl and Uil trade union confederations instead believe that, in order to operate successfully in increasingly competitive markets, firms must be stimulated to create high-quality jobs by organising effective vocational training schemes and constructing a social safety net made necessary by the proliferation of unstable and discontinuous employment relationships. In the view of the unions, therefore, collective bargaining has a crucial role to play in ensuring that the use of the new forms of flexible work does not lead to the 'precarisation' and impoverishment of jobs.

Comments

The changes taking place in the Italian labour market - the diversification of contractual forms and greater participation in the labour market by hitherto relatively marginal groups (women, young people and immigrants) - and in the Italian economic system (increasing reorganisation of the manufacturing sector, mainly by means of relocation, and the growth of the services sector) have had major consequences, one of which is the redefinition of occupational structures. As seen above, the growth of jobs in 2003 confirmed trends apparent since 2000: a greater presence of women, the ageing of the working population, and a slow rise in educational levels.

In order to cushion the possible negative effects of these changes, but also to seize the opportunities that they provide, the social partners are trying to propose innovative solutions. In particular, there is a seemingly increasing need to avoid a situation whereby the segmentation of the labour market and the organisational and technological changes now taking place in all sectors exacerbate the polarisation between high-skilled and unskilled occupations. To this end, it seems crucial to strengthen the incentives for continuing training and give easier access to it, especially for unskilled workers. Despite the initial difficulties in setting them up, the intersectoral continuing training funds may prove extremely useful instruments for this purpose.

If Italian firms are to remain competitive in international and domestic markets, of crucial importance may be the ability of the social partners and government institutions to combine labour market strategies (eg the creation of a system of 'social shock absorbers' able to furnish the unemployed with concrete support in the form of labour market re-entry services and retraining courses) with industrial relations strategies (eg the involvement of workers’ representatives in decisions concerning technological and organisational innovation).

From a broader point of view, an effective education and training policy cannot be restricted to 'mechanical' updating on the use of new technologies used in the main productive sectors. Besides incentives for specific training, also necessary may be the orienting of the entire educational system to the extension and strengthening of general training, the purpose being to furnish the abilities necessary if the labour force is to adapt to technological and organisational changes as and when they arise. (Diego Coletto, Fondazione Regionale Pietro Seveso)