Inflation, this is how much Italians’ wages have shrunk

The The cost of living slows down but continues to eat away at salaries, which do not keep pace, significantly reducing purchasing power. With the measure we would like to help those who are most in difficulty but the government has raised a wall on the minimum wage and more than half of the employees are waiting for the renewal of the national employment contract to get an increase

How much has inflation weighed, and is weighing, on the pockets of Italians? We see it first hand every day: with the same money in our pockets as one, two, three years ago, we are able to buy fewer things. Because while prices are rising, salaries have remained stagnant, or increased less than the cost of living.

The high cost of living has eroded purchasing power

At the end of last year, the OECD told us, real wages in Italy had fallen by 7 percent compared to before the pandemic broke out. In simple terms it means that on a salary of 1,500 euros per month more than 100 euros have been lost in purchasing power: the amount on the payslip has remained the same but inflation has reduced its value.

Over half of the employees are waiting for their contract to be renewed

It doesn’t go much better if we look at contractual wages, i.e. the wages established in national agreements. They rose in the first six months of this year – explains Istat – but remain below 6 percentage points compared to the cost of living. These are table wages, drawn up by agreements between companies and unions and which do not take extraordinary items into account, but they represent an important index because over half of the employees have a contract that has expired for more than two years, and are therefore waiting for a raise .

The anti-inflation measures in the budget

Adapting these contracts is crucial, but it is not enough. The unions are also calling for a reduction in taxes and contributions paid by workers. With the maneuver, the government wants to maintain the cut in the tax wedge, and is also studying a lighter levy on medium-low incomes with a remodulation of the Irpef and discounts for those who are most in difficulty. Bonuses, such as those on petrol and bills, which made it possible to support families’ bills, but some of these have already disappeared.

Minimum wage, the government says no

On the minimum wage, however, Palazzo Chigi has raised a wall. Establishing by law a pay of at least 9 euros gross per hour, as proposed by the opposition, would benefit over four and a half million Italians (if we do not consider thirteenth salary and severance pay). An army made up of agricultural workers, domestic workers and carers but also many employees of companies where the minimums set by the agreements are not respected or where they are hired with a “pirate” contract, i.e. signed by unrepresentative organizations and with starvation wages.