Firenze 7 Maggio 2016

Italy has been a point of reference for me because of the historic strength of its labor federations. When I lived here in 1971-72 (here and here) the unions were at the apex of their power and central to all discussions of radical societal change. That power has declined but the percentage of workers in unions remains at 37.2% of the entire workforce. This is more than three times the “density” of US unions at a paltry 11%. The Italian number is more impressive if one takes into account that membership in the various labor federations is a matter of personal choice not a “term and condition of employment” as it is for most US union members. The percent of Italian workers covered by collective negotiations is 80%! This means that the great majority of Italian workers are covered by contracts negotiated by unions that they don’t even have to belong to.

The Italian union federations and political parties (more on the “parties” in a future installment) have been under great pressure to loosen the terms of employment to make it easier for employers to hire and fire. They have also acceded to “two tier” employment contracts as have their American manufacturing counterparts like the UAW. For the generation of those born prior to the January 1, 1970 pensions will be 90% of their last earnings as long as they have 18 years of work credit. For those under 40 today the pension will only be 36% of salary.

This retirement income disparity is enormous. The annual earnings gap across generations is also enormous: a 24 year old worker makes on average 19,217 Euros per year vs. a 55 year old worker’s 31,873 Euros. No wonder that the discourse in the “dailies”, “I Giornali” is all about the generation gap and not the class struggle. The former Prime Minister of Italy Mario Monti was quoted as asserting that the youth of Italy born in the 70’s and 80’s were a lost generation and that Italy could only hope to limit the damage to them and provide better for subsequent generations. Our friend Enrico, born in the 80’s, hipped me to an article on a blog called “Medium Italy” written by Maurizo Pittau and entitled, “The Lost Generation of the 70’s and 80’s“. Pittau says young Italians of his generation have only two choices: Accommodate a corrupt system and work precariously or leave the country. He has chosen the latter as have many young Italians. Youth unemployment is 35% nationally and over 50% in the historically underdeveloped South.

Pittau cites a figure of 8 million workers in the precariat: the underemployed, temps, self- employed. Of that number he calculates that 4 million are the in the black market economy. The discussion of the precariat and the verification of the numbers is as my friend Nicola put it, a “Tower of Babel”, lots of numbers and lots of definitions and lots of confusion. This is certainly true in the United States where whole industries are characterized as “precarious” with no reference to solid research and numbers. The best figures I could find for Italy and employment on a web site called ItaliaOra.org indicates the following:

Italian population: 62, 375, 215
Total Italian workforce: 24,820,424
Precariat: 3,488,940
Unemployed: 3,267,950

The precariat then represents 14% of the total workforce. This is a growing number and a preoccupation of the labor federations who see their power slipping as enrollment declines and the younger generation is increasingly skeptical of trade unionism and the two tier deals that impact their cohort.

“Common sense” has it that unions are antiquated self-serving protection rackets for the older generations with fixed employment contracts and generous pensions. However one respondent to Pittau’s blog, Daniele Dellafiore, said that he thought there was a “third way” to deal with the challenges to the “lost generations”. Rather than accommodate the injustices or flee the country, he has chosen to stay and changes things. Stay tuned as my discussion with CGIL (Confederazione Generale Italiana dei Lavoratori) leaders and activists will hopefully paint a picture of what staying and changing things looks like here in Italy.

La lotta continua….

*Class Struggle or Generational Struggle?!

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In response to my post entitled Class Struggle or Generational Struggle, Nicola wrote:

Firenze 9 Maggio 2016

Dear Peter,

Generational conflict or class struggle? There are four fundamental points:

1. On the crisis of the unions caused by their membership losses in key sectors of the economy and the excessive power of the associations of the pensioners, an article in La Repubblica of August 19, 2015 by Matteo Pucciarelli details how profound the change in the composition of the unions is. (Olney summary: Pucciarelli writes about an extensive report prepared by the CGIL, Itay’s largest and historically Communist led union federation. The report includes many details but the fundamental and startling fact is that in the period from the end of 2014 until August of 2015 the federation lost 723,969 members. This is a 13% loss in a year from a total of 5.6 million members. This membership is voluntary unlike most membership in the United States. The largest losses in membership come in growth sectors of the economy like retail. The other stunning fact is that over half the membership of the CGIL are pensioners, therefore the political weight of the retired plays an outsize role in determining the future of the union with respect to the newly employed. For readers of Italians here is a link to the article in La Repubblica: )

2. The “dualism” in labor rights between workers who work in enterprises with more or less than 15 employees means a diversity in pay and rights.

3. Union policy that punishes the young. The newly hired cannot enjoy the same rights with respect to salary, holidays, job protections and least of all to pensions even though they do the identical job of more senior workers. I emphasize that I am not talking about the plethora of numbers in contract precarious work invented in the last twenty years, nor those covered under IVA (Imposta sul Valore Aggiunto – Tax on Value Added) the fiscal management of those “professionisti” who work not for a salary but for a fee. There is no fixed deduction on a salary (which they don’t have) but they pay IVA on the total compensation received in the fiscal year (a total often very high but varying from year to year). Given they are compensated with a fee their employment can end at any time.In fact these workers work for an enterprise but are paid less than employees doing the same work.

4. The pensions are a symbol of how slow the unions have been to take into account the changes in the labor market (and the general political situation); until the reform of 1995 it was possible to retire with 35 years of service regardless of your age. In other words someone who went to work at 14 years old after finishing minimum mandatory schooling could retire at 50 years old. After the reform two scenarios exist to activate the pension:

a. One needs 35 years or more of service and an age of at least 57 or;

b. 40 years of service independent of age.

These conditions were not sustainable in the long run because of increasing life expectancy. Salary and regulatory concessions were made primarily by governments of the left but also by the Alema government which tried to make reforms that were blocked.

Nicola