Italy approves May Day labour package amid union criticism By Reuters

By Giuseppe Fonte and Alvise Armellini

ROME (Reuters) -Italy’s right-wing government on Monday approved measures to boost jobs and workers’ pay, amid hostile reactions from unions and opposition parties over accompanying welfare cuts and looser rules on short-term job contracts.

Prime minister Giorgia Meloni made it easier for firms to offer job contracts lasting between 12 and 24 months and will scale back a “citizen wage” poverty relief scheme, introduced in 2019, by the end of the year.

Her administration also earmarked around 3 billion euros ($3.30 billion) for a six-month cut in the so-called tax wedge, the difference between what an employer pays and what a worker takes home, but only for employees with an annual income of no more than 35,000 euros.

“It is a concrete step against the cost of living crisis,” Economy Minister Giancarlo Giorgetti said, adding tax cuts would be worth on average 100 euros per month.

Amid government pledges to address a national birth crisis, Rome waived taxes for this year on fringe benefits for employees with children, up to a maximum of 3,000 euros per worker.

Maurizio Landini, head of the main Italian union CGIL, criticised the package, saying wages in Italy were low due to high taxes but also because of an unprecedented “level of job insecurity.”

He previously complained that approving the measures on May 1, International Workers’ Day, was an “act of arrogance”.

Labour Minister Marina Calderone defended the reforms, saying the government was keen to support “those who need to work but also those who want to work.”

SLIMMED DOWN “CITIZEN WAGE”

As part of a drive to loosen labour market rules, Meloni increased the scope for using job “vouchers”, an extreme form of labour flexibility popular among businesses, although critics say they leave ample room for abuses.

Spain, southern Europe’s other major economy, has taken an opposite path, with a centre-left government pushing through legislation to raise permanent contracts among young workers.

Meloni also made it a priority to slim down “citizen wage” payments, with the stated goal of encouraging able-bodied people to look for work.

Under a draft seen by Reuters, subsidies for poor people in the 18-59 age group will be cut to 350 euros a month, from a current average of around 550 euros per family, limited to a maximum duration of 12 months and subject to participation in job training schemes.

Poor households with minors, pensioners or disabled people will be eligible for slightly more generous payments of more than 500 euros a month, for a maximum of 30 months.

A further tax break, valid until December, is designed to encourage entrepreneurs to hire young people who are neither working nor studying.

In Italy, 23.1% of people in the 15-29 age group fall in the “NEET” (Not in Education, Employment or Training) category, the highest proportion in the European Union, where the average is 13.1%, according to 2021 data from Eurostat.

($1 = 0.9095 euros)