In mid-February, an announcement made the rounds in Italy: the government is in the process of founding the “Italian Agency for Youth”. It is intended to ensure that Italy spends the EU money it receives for its young generation in the best possible way.
It will be many billions of euros because Italy will receive the absolute highest amount from the Corona reconstruction fund “Next Generation EU”: more than 190 billion euros. And a large slice of it is intended for the youth.
Because the sometimes dramatic situation of young Italians is now recognized as one of the greatest emergencies in the country: recently, every third 15- to 24-year-old was unemployed. And the proportion of 15- to 29-year-olds who do not study and do not work – the so-called NEET rate – is at 23 percent, the highest in the entire EU.
And that has been the case for decades: the NEET rate was already 22 percent in 2000 – twice as high as it was in Germany at the time. But while the situation of young Germans has steadily improved since then, Italy is even worse off today than it was 22 years ago.
This precarious situation of Italian youth is bad news in itself: With a historically low birth rate and an aging society, the responsibility for Italy’s future – and the burden of the pension system – rests on too few shoulders.
But still too little is being done to enable young Italians who study and work to live comfortably. At the same time, their problems are a reflection of the difficulties plaguing the Italian economy. Because they reveal what doesn’t work in Italy as a whole.
Therefore, a video that circulated on the Internet at the beginning of February caused a stir: In it, 27-year-old Ornela Casassa from Genoa complains that she was only being offered a monthly salary of 900 euros for an entry-level position as a civil engineer.
Casassa turned down the offer and in the video complains that the situation of young professionals in Italy is becoming increasingly precarious and that the left-wing parties and the unions are doing nothing about it.
Pietro Reichlin, Professor of Macroeconomics at the LUISS University in Rome, believes that young professionals suffer particularly from the encrusted structures of the Italian labor market. In his opinion, the rigid collective agreements are to blame: “These agreements reward seniority rather than earnings and do not give employers any flexibility. That’s why even very capable young professionals receive low salaries because companies can’t pay them any better than older employees,” says Reichlin. Because, just like in politics, the interests of the older generation, which is numerically superior, come first in the trade unions.
In addition, there is the overall low salary level in Italy: According to Eurostat, an employee in Italy earns an annual average of only around 30,000 euros – and thus 3,500 euros less than the EU average, 10,000 euros less than a Frenchman and a whole 14,400 euros less than a German. And that with similar living costs – at least in the center and north of the country.
Reichlin sees another problem in the fact that the Italian economy continues to consist primarily of small and medium-sized companies: “There are only a few large companies that demand highly qualified workers and pay them appropriately. That also helps to keep salaries low.” In addition, the companies that are successful today often established themselves on the international market in the 1980s with products with a low technology share. Today they are therefore not dependent on highly specialized employees – or just on a few whose positions are already filled.
“The combination of a rigid market, centralized collective bargaining agreements, heavy tax burdens and over-regulation leaves little room for companies to grow as they wish. So there is a surplus of small firms that are not contributing enough to productivity growth,” says Reichlin.
The situation in southern Italy is even more serious, as Giustina Orientale Caputo, labor sociologist at the Federico II University in Naples knows. Because the problem there is not too low salaries, but the lack of jobs: “Anyone looking for work in the south either has to move away or loses courage,” she summarizes. The first move takes the young Italians north. But since opportunities are limited there too, many eventually leave their homeland and move to other EU countries.
According to the national statistics institute Istat, around 240,000 Italians have left the country in the past ten years. A particularly large number of them belong to the younger generation. President Sergio Mattarella recently warned: “Those who go to study or work are primarily young people (…) with a high level of education. They often don’t come back.” Italy must therefore think about what it can offer its citizens who want to stay at home or return to Italy.
Some solutions are in the national reconstruction plan, which determines how the billions from the EU Corona reconstruction fund should be used. There is something about the digitization of public administration, about the establishment of local hubs where young people can learn and work together, or about the creation of jobs for the young generation in all sectors to do with the EU Green Deal have.
But Orientale Caputo doubts that the national reconstruction plan will really improve the situation of young people, despite EU funding worth billions: “The projects have to be planned and implemented at local and regional level and are therefore very fragmented and difficult to understand,” she says.
Your criticism is justified, because Italy is notorious for failing to spend promised EU funds on time. The sticking point is always the administrations at the local level, which are not up to the complex application procedures for EU projects.
At the end of January it became known that Italy had not yet spent eight billion euros from the European social fund for the 2014 to 2020 budget. If the country does not achieve this by the end of 2023, it will lose the funds that were intended to improve labor market opportunities for the younger generation. But the prospects are poor, considering that just 2.8 of the available 10.7 billion euros have been spent in the previous seven years.
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