Italy moves to boost flagging job market

But critics say the bill, set to be approved Tuesday, is emblematic of what's wrong with Italy's whole economy – one of the least productive among industrialized nations.

from the August 5, 2008 edition

Milan, Italy - On Tuesday, Italy's conservative government is set to approve a bill designed to accelerate its painful transition, driven by globalization, from a tightly regulated job market to a more flexible one. But critics say the measure would make it harder for Italians to secure stable jobs while leaving untouched the privileges of those with permanent contracts, who are more likely to be behind market stagnation.

Many analysts say this law is emblematic of what's wrong with the whole Italian economy, which is one of the least productive among industrialized nations, according to the Organisation for Economic Cooperation and Development.

In Italy, employees are divided into two categories: those who are hired on permanent contracts and cannot get fired no matter how they perform, and those who are retained on short-term, "precarious" contracts that usually last less than two years and offer no possibility of career advancement.

Not only can young people be easily fired. "They are constantly jumping from one three-month contract to another," says labor activist Sveva Stallone, who runs an online journal dedicated to the issue. "They never get promotions or a decent salary."

Until now, short-term workers – about 14 percent of the workforce – could sue if employers breached the contract, and thus win a permanent job. But, in the face of a lawsuit brought by 27,000 postal workers for alleged breach of labor law, the government introduced a bill that would temporarily suspend that provision. Under the new law, employers would no longer be obligated to issue permanent contracts to victors in such lawsuits.

"The whole episode shows just how sick is our economic system, where suing your employer has become the primary way to get a contract," says Tonia Mastrobuoni, who covers economic policy for daily Il Riformista.

Career frustration is a hot topic among young Italians; last winter, a bittersweet comedy about a college graduate who couldn't get a decent job was a major box-office success. "This is no youth-friendly country, for sure," says sociologist Giuliano Da Empoli. Yet he worries that the media and pop culture are putting down young people: "Everybody is telling kids they have no future" he says. "This is getting to be a self-fulfilling prophecy."