[Italy] Central bank chief backs minimum wage to address inequality

On May 31, the head of Italy's central bank backed the introduction of a minimum wage to address social inequalities, Reuters reports.

In his speech, Ignazio Visco - the Bank of Italy Governor - also urged the government not to jeopardise the tight schedule agreed with European Union authorities to use 192 billion euros of post-pandemic recovery funds. 

"There is no time to lose," Mr Visco said, adding that improvements to plans could still be negotiated.

"Constant liaising with the (European) Commission will be absolutely necessary, as well as useful and constructive," he told the central bank's annual meeting.

In addition, Mr Visco - who steps down later this year - reportedly spoke of the role that well-managed migration could play in helping offset the impact of Italy's low birth rate on the economy over the next two decades.

Short-term contracts

The bank chief referenced the problems the job market in Italy is having, with employment levels propped up by low-pay short-term contracts.

"Too many, not just the young, do not have official jobs or, if they do, are not offered adequate contractual conditions, as in the other major countries," Mr Visco said.

He said a fifth of young workers were still on temporary contracts even after being in a job for five years.

"Introducing a well-designed minimum wage system could be the response to non-trivial demands for social justice."

Last weekend, Prime Minister Giorgia Meloni said the measure was only good in theory and could backfire in practice.

In Italy, gross domestic product per hour worked reportedly rose just an annual 0.3 per cent in the past 25 years, less than one-third of the average for the other euro area countries.

And, in real terms, hourly wages had one of the weakest growth rates in Europe.

Growing older

Mr Visco cautioned that Italy's ageing population won’t be able to sustain economic growth in the next two decades even in the best-case scenario where participation rates of women and young people improve from current low levels.

"The effects of the decrease in the population in the central age groups may be mitigated in the medium term, besides by an extension of the working age, only by an increase in net migration," he said and cited the need for training and integration programmes.

The prime minister has reportedly drafted tougher asylum rules since taking office. She has also stated that she will increase channels for legal migration.

Source: Reuters

(Quotes via original reporting)

On May 31, the head of Italy's central bank backed the introduction of a minimum wage to address social inequalities, Reuters reports.

In his speech, Ignazio Visco - the Bank of Italy Governor - also urged the government not to jeopardise the tight schedule agreed with European Union authorities to use 192 billion euros of post-pandemic recovery funds. 

"There is no time to lose," Mr Visco said, adding that improvements to plans could still be negotiated.

"Constant liaising with the (European) Commission will be absolutely necessary, as well as useful and constructive," he told the central bank's annual meeting.

In addition, Mr Visco - who steps down later this year - reportedly spoke of the role that well-managed migration could play in helping offset the impact of Italy's low birth rate on the economy over the next two decades.

Short-term contracts

The bank chief referenced the problems the job market in Italy is having, with employment levels propped up by low-pay short-term contracts.

"Too many, not just the young, do not have official jobs or, if they do, are not offered adequate contractual conditions, as in the other major countries," Mr Visco said.

He said a fifth of young workers were still on temporary contracts even after being in a job for five years.

"Introducing a well-designed minimum wage system could be the response to non-trivial demands for social justice."

Last weekend, Prime Minister Giorgia Meloni said the measure was only good in theory and could backfire in practice.

In Italy, gross domestic product per hour worked reportedly rose just an annual 0.3 per cent in the past 25 years, less than one-third of the average for the other euro area countries.

And, in real terms, hourly wages had one of the weakest growth rates in Europe.

Growing older

Mr Visco cautioned that Italy's ageing population won’t be able to sustain economic growth in the next two decades even in the best-case scenario where participation rates of women and young people improve from current low levels.

"The effects of the decrease in the population in the central age groups may be mitigated in the medium term, besides by an extension of the working age, only by an increase in net migration," he said and cited the need for training and integration programmes.

The prime minister has reportedly drafted tougher asylum rules since taking office. She has also stated that she will increase channels for legal migration.

Source: Reuters

(Quotes via original reporting)