In 2023, there were notable developments in Italy’s labour law and economic policies under the leadership of Prime Minister Giorgia Meloni, the first woman to hold this position in the country.
A significant legislative change was the introduction of the Labour Decree (Decree 48/2023), which marked a departure from previous social welfare policies. This decree repealed the Citizenship Income (RdC), a financial support provided by the Italian government to individuals or families in poverty to ensure a minimum income and promote social and employment inclusion. In its place, two new measures were adopted: the Inclusion Allowance (ADI), a financial support aimed at individuals facing poverty and social vulnerability, intended to promote social and employment inclusion, effective from 1 January 2024; and the Support for Training and Work (SFL), a programme that provides training and job opportunities to help individuals enhance their professional skills and facilitate their entry or return to the job market, effective from 1 September 2023. This policy shift indicates a strategic move towards targeted social inclusion and labour market activation. The Italian General Confederation of Labour (CGIL) trade union criticised the abolition of the RdC, labelling it a social crisis, leaving hundreds of thousands without support. The organisation condemned the government’s action for creating a divisive system that excludes many from the new ADI, significantly impacting vulnerable populations. The effectiveness of these new measures in comparison with the outcomes of the RdC remains a subject for future evaluation.
Another significant issue was the debate over the introduction of a statutory minimum wage. Following the European Commission’s proposal for a directive on adequate minimum wages, Italian opposition parties (excluding Italia Viva) reignited discussions on this topic. The Conte et al S. 1275 bill proposed in July 2023 suggested a minimum wage of €9.00 per hour, aligning with Article 36 of the Constitution. However, it did not pass. Despite this, several court rulings invalidated agreements with low minimum wages. Conversely, a report by the National Economic and Labour Council (CNEL) opposed the concept of a statutory minimum wage, citing high coverage of collective bargaining agreements (around 95%). Regarding the social partners, CGIL and the Italian Workers Union (UIL) support a statutory minimum wage, while the Italian Confederation of Workers’ Unions (CISL) and the employer organisation Confindustria oppose it.
To combat inflation, the Labour Decree included measures such as a reduction in the tax wedge and an increase in the limit of tax-free fringe benefits for employees. These steps indicate the government’s focus on tax reduction and work activation, although they do not directly address concerns regarding job quality and wage levels. Furthermore, the government dedicated a substantial portion of its financial measures to economic incentives to mitigate inflation's impact, particularly for medium–low income groups and businesses facing high energy costs. These measures respond to public demands for economic stability. However, they represent short-term solutions, underscoring the need for comprehensive, long-term strategies to ensure economic sustainability and efficient resource allocation, thus reducing the financial burden on families and businesses.
Regarding social dialogue, the Ministry of Labour engaged in discussions on labour market and migration policies, focusing on integrating migration policies to match labour market needs in Italy. Additionally, talks with the social partners addressed pension reforms, exploring flexible retirement options and revising the Fornero Law to consider new pension measures.
Overall, 2023 was marked by significant policy shifts in Italy's labour and economic landscape, reflecting the new government’s approach to addressing complex challenges. The long-term effects of these policies remain to be seen and will be a critical aspect of Italy’s socioeconomic future.
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