Transcript Labour movement, social cohesion, welfare in Italy

- Labour Market, Social Cohesion,
and Much More: a Primer on
Welfare in Italy Ijin Hong
Sungshin Women’s University
[email protected]
Outline
 Some background: a regressive cycle?
1.
2.
3.
4.
The federal reform
Ageing and low fertility
Poverty and inequality
A segmented labour market
 The Italian welfare state now and then
1.
2.
3.
4.
History
Southern European welfare states
Structure
☞A focus on labour market policies
Civil society
 Why is it difficult to change
1.
2.
3.
Economic crisis
Difficult reforms: the political hitch
Social consequences of the crisis
 In conclusion: ways ahead?
1.
2.
The risk of an economic recession
What to learn from the case of Italy
Some background:
A regressive cycle?
1.
2.
3.
4.
The federal reform
Ageing and low fertility
Poverty and inequality
A segmented labour market
1. The federal reform
 Difficult administrative/political balance: central or federal
government?
 ☞The federal reform has been the main issue for the political
agenda of the Berlusconi government in 2001 (Northern League
party’s influence)
 The 328/2000 law (Frame law for the realization of an
integrated system of interventions and social services):
several actors and governance levels
 Central state (responsible for setting minimum levels of care –
LEA)
 Regions (planning, monitoring, coordination)
 Provinces, Municipalities (implementation, service delivery)
 Third sector accreditation standards
 2001 reform of the 5th title of the Constitution: regions
almost completely in charge of social policies (Pizzuti 2011)
2. Ageing and low fertility
 Age pyramids for year 2010 and year 2035 (projections)
(Hong 2012)
 Fertility per regional area, 1952-2010 (홍이진 편
2012)
3. Poverty and inequality
Income inequality:
 By region: In 2004 the Gini index scored 29.8% in the North-East,
31.6% in the North-West, 28.3% in the central regions excluding
Lazio, 33.7% in Lazio, 35.4% in the Islands. While Lazio is the most
unequal region in Italy, Friuli and Trentino are the most equal
(26.2 and 26.6%).
 Worsened trend: according to LIS data, the Gini index has
worsened from 29% (1991) to 34% (1993)
 Reasons: abolition of the «scala mobile» effect in the 1980s?
Currency, political, and economic crisis of the Amato government
(1992)?
Income inequality in a comparative
perspective (Pizzuti 2011)
Gender inequality
 After Turkey and Mexico, Italy has the third lowest labour
force participation rate (51%) among OECD countries (65%).
Less than 30% of children under three years of age attend daycare services and about
 one-third of Italian working women works part-time to
reconcile work and family commitments (OECD average is
24%).
 Women are often regarded as the main "family carer": Italian
women do on average 3.7 hours a day of household work
more than men, holding back growth in female employment
growth. (www.oecd.org/gender/closingthegap.htm)
Intergenerational inequality
 Low employability of younger cohorts: partly due to the labour
market’s structure, partly to overeducation
 High intergenerational transmission of income inequalities (lack
of merit) (Franzini 2010)
Poverty:
 Istat: in 2008 relatively poor families were 2,737,000 (11.3% of
population)
 Eurostat: for the same period, relative poverty has been
estimated at 20% of the population (60% of the median income)
 High children’s poverty: 25% (only Romania and Bulgaria in the EU
are doing worse)
 Working poor, elderly people with dependent family members,
short-term contracts also vulnerable to poverty. (Franzini 2010)
4. A segmented labour market
 Flexibility without security:
 Labor market reforms (1997
and 2003) aimed at decreasing
unemployment levels and
increasing low employment
rates (still in 2008, 58.7% of the
total working age population
against a European average of
65.9%): the use of temporary
work contracts was
consistently liberalized 
increase of temporary
workers!
 Dualization of the labour
market: marked inequality in
labor and social conditions
between standard and nonstandard workers (홍이진
2012, ch.2.1)
Source: 홍이진 편 2012
Corporatism & market failure:
 the Italian wage setting system is centered on national collective
agreements at industry level, whose provisions extend to all
workers and firms and thus establish minimum wages.
 Decentralized wage bargaining at firm level is intended to
integrate workers' wages with top-ups tailored on the specific
conditions of individual firms  relevant disparities in wage levels
across firms depending on their size
 Professional orders system limiting access to the labour market
(lawyers, doctors, journalists, accountants, etc.)
Over education problem: the Italian labour market has a
production structure that does not encourage accumulation
of human capital
 % of people with a university degree is already low by OECD
standards: 13% vs. a OECD average of 27% in 2006 (Franzini 2010).
The Italian welfare state now
and then
1. History
2. Southern European
welfare states
3. Structure
4. Civil society
1. History
(홍이진 2012)
Establishment Social
(1880-1940s) expenditure
rise
(1940-1970s)
Reform
Crisis and new
windows (1970- political
2000s)
patterns
(2008-now)
Main political
forces
Reign of Italy,
fascism
DC
Berlusconi,
Amato, Dini,
Prodi
Monti, Letta
Logic of welfare
development
Legitimation
Gaining
middle
classes’
consensus
Readjustment
and populist
conservatism
Adjusting
public finances
Welfare stage in
comparative
literature
Origins
Golden age of
welfare
Recalibration?
Themes: ■Top-down welfare development; ■ Failed recalibration?
2. Southern European welfare states
 Institutionalized health care, fragmented pensions, high
level of particularism and clientelism (Ferrera 1996).
 Low levels of expenditure (Raitano 2012)
 Low levels of redistribution (Kammer et al. 2012)
 Focus on income protection, small scope for social services
in kind.
 Protection strongly depends on the employment situation
(Palier 2010).
 Institutional stickiness/difficulties in reforming the system.
3. Structure: old risks vs. new risks
Social
security
(INPS)
• Pension system
• Insurance against
accidents
• Labour market policies
hybrid
Social
services
• Health system
• Social assistance
• Family policies
 Central
government
 Agreements
with social
parts
 Local
governments
☞For more details: 홍이진 편
(2012)
Social protection spending in
selected Bismarckian countries in
2009 (% of GDP)
100%
90%
80%
13.3
8.1
12.8
6.3
15.0
6.1
47.1
51.5
32.1
29.8
Germany
Spain
5.3
2.8
12.5
3.0
11.5
66.2
53.8
52.6
29.7
25.7
30.8
29.7
France
Italy
United Kingdom
EU15
6.2
70%
60%
48.3
50%
40%
30%
20%
10%
0%
Sickness
Old age, disability, survivors
Source: 홍이진 편 (2012).
Unemployment
Other expenses
Public social expenditure in Italy, by
sectors
Unit: Current LCU
250000
200000
150000
100000
50000
0
1980
1985
1990
1995
2000
2005
Old age public
Health in kind
Family
Unemployment (cash)
Housing (in kind)
Other social policy areas
Source: OECD (2012).
2007
2008
2009
ALMP
☞ Institutional stickiness?
* A focus on labour market policies
 Source: 홍이진 편(2012)
 Three central features typical of the Italian system of so called 'social shock
absorbers' (ammortizzatori sociali).
1.

2.


A traditional predominance of short time work schemes – the Wage
Compensation Fund (WCF, Cassa Integrazione Guadagni) over unemployment
benefits.
The WCF provides a wage replacement for workers who are affected by temporary
work suspensions during periods of firm's crisis.
A relevant segmentation in the organization of public schemes across different
economic sectors and firm size classes makes up for the 'corporatist' (Ferrera
1996) character of social shock absorbers.

3.


Conjunctural WCF covers firms and workers mainly in manufacturing sectors
structural WCF introduces a further differentiation in terms of size class, as it
includes only larger firms in the manufacturing, commercial and touristic sectors.
Workers in the latter firms are also entitled to a special unemployment benefit – the mobility
allowance – intervening after collective dismissals.
the Italian income support system is exclusively based on social insurance
mechanisms.
Moreover, strict eligibility rules have the effect of barring access to unemployment
benefits for young entrants in the labor market and discontinuous workers.
According to recent estimates, 3.2 millions Italian workers who lose their job are
excluded from any income protection scheme (홍이진 편 2012)
4. Civil society
Income inequality and the “television model” (Franzini 2010):
 Highest income levels for superstars from TV shows and sport
(football)
 Creation of an audience as an economical resource generating
revenues with no connection to the public’s willingness to
choose its services
Political parties and the lack of ideologies
 P D L, PD, 5-Star Movement (M5S)
Politicization of the social rights: Low representativeness of
the socially vulnerable groups in politics (labour market
fragmentation does not help)
Why is it difficult to change?
1. Economic crisis
2. Difficult reforms: the political hitch
3. Social consequences of the crisis
1. Economic crisis
 « Excessive austerity in Southern European countries is
the consequence of policies that for too long neglected
sustainable growth, thus accumulating strong public
and private debts. [...] A mountain of deteriorated
credits is burdening the banks and ushering to a flow of
public spending to the industry. Why don’t we think of
the society, the ultimate bearer of all these troubles?»
(lavoce.info, 2013/11/08)
 ☞Political opportunism of elites: blaming the
constraints to the budget given by EU requirements!
GDP growth and household final
consumption expenditure growth
10
8
6
4
2
0
1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
-2
-4
-6
-8
GDP growth (annual %)
Household final consumption expenditure (annual % growth)
 Unit:%
 Source: World Bank (2012).
2. Difficult reforms: Reforming
Bismarckian welfare states
 “Frozen landscape” (Pierson 2006), “Elephants on the
move” (Hinrichs 2000)
Conservative-corporatist welfare states:
 Preservation of status differential
 Social insurance-based system with a focus on income
protection (highly fragmented)
 Church, traditionalism, and the subsidiarity principle
Southern European welfare systems:
 Employment situation
 Particularism and clientelism (political vein) (Ferrera 1996)
 Increasing inequalities (Kammer et al. 2012)
The political hitch: Social policy reform
mechanisms in Italy (Hong 2013)
 Cognitive activity of policy
elites:
 State-capital nexus
 Clientelism/Corporatism
 Institutional inertia &
conservatism
 Policy learning part is
missing
 EU influence for change
 World (economy, society):
 Weak working class
 Needs ≠ problem area
 Considerable media
constraints
 ①-②: Vicious circle, lack
of substantive welfare
reform
 ③-②: Difficult feedback
 ②-③: Welfare cuts
3. Social consequences of the crisis
 Austerity measures implemented by the Monti
government: avoiding the risk of default for the Italian
economy.
 Welfare cuts policy, especially politically weakest
sectors, i.e. education, health, and social services.
 Overall social vulnerability worsening
 Unemployment levels soaring up
 Intergenerational, gender, and territorial inequalities
contributing to a difficult social mobility in Italy.
Unemployment rate 1992-2012, per
gender and age
In conclusion: ways ahead?
1. The risk of an economic recession
2. What to learn from the case of Italy
1. The risk of an economic recession
 The federal reform
 Ageing and low fertility
 Poverty and inequality
 A segmented labour market
 Economic crisis
 Neoliberal cuts to welfare…
*crash*
 Problems accumulate instead of being solved: gender, territorial,
income, intergenerational inequalities, labour market
dualization, segmented labour market & social security system…
2. What to learn from the case of Italy
 Avoiding the political hitch :
 Neglect of real societal needs (top-down approach)
 Political decision makers’ blame avoidance (ex. Referring
responsibilities for austerity measures to EU institutions)
 Lack of agreed upon definitions of the collective good and accepted
levels of inequality
 Vulnerability to the economic requirements dictated by the world’s
economy and financial institutions whenever the country is hit by a
bad economic situation (Hong 2013)
 Getting feedback from civil society  agreeing on some standard of
social justice
 An active involvement of trade unions and civil society to the decision
making process
 A more transparent media information system
 A more democratic competition in the political arena can help in
keeping the whole policy change mechanism (Sabatier 1988) work
more efficiently.
References
 홍이진(편)(2012). 주요국의 사회보장제도: 이탈리아. 한국보건사회연구원.
 홍이진 (2013). Italian welfare in the aftermath of economic crisis. Understanding welfare reforms in the lig
ht of alternative theoretical approaches. 한국사회정책 20(3): 197-221.
 Ferrera, M. (1996). The ‘Southern model’ of welfare in social Europe. Journal of European Social Policy.
6(1), 17-37.
 Franzini M. (2010). Ricchi e poveri: l’Italia e le disuguaglianze (in)accettabili. Universita` Bocconi editore.
 Hinrichs, K. (2000). Elephants on the move. Patterns of public pension reform in OECD countries. European
Review. 8(3), 353-378.
 Kammer, A., Niehues, J., Peichl, A. (2012). Welfare regimes and welfare state outcomes in Europe. Journal
of European Social Policy. 22(5), 455-471.
 OECD (2012). OECD Social Expenditure database 1980-2009. Paris: OECD.
 Palier, B. (2010). A long goodbye to Bismarck? The politics of welfare reforms in continental Europe.
Amsterdam: Amsterdam University Press.
 Pierson, C. (2006). Beyond the welfare state: the new political economy of welfare. Polity Press.
 Pizzuti, F.R. (2011). Rapporto sullo stato sociale. Academia Universa Press.
 Raitano, M. (2012). 소득분배와 사회보장 재정. 홍이진(편). 주요국의 사회보장제도: 이탈리아.
한국보건사회연구원.
 Taylor-Gooby P. (eds.) (2004). New risks, new welfare: the transformation of the European welfare state.
Oxford University Press.
 World Bank (2012). World Development Indicators. Washington DC: WORLD BANK.
 www.dati.istat.it
감사합니다~
Grazie.
Ijin Hong
Sungshin Women’s University
Email: [email protected]