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Thursday, 16 April 2015

A gloomy portrait: a look at the Italian scenario within its policies, opportunities & poverty

2015 biella (it) - pavement
My participation to the FEANTSA employment working group requires the data & impact analysis of policies targeting people experiencing social exclusion both at the national & European level. The data so far-collected enlightens a general & gloomy framework. At the same time, a picture of disarming clarity emerges when defining the performance & the italian national prospects.
Let's start with the state of the art concerning employment & work, where a “certain discrepancy” breaks through between the data presented by Istat and the media narrative offer.
The first example is the statement of the Minister of Labor concerning the increment in the activation of new job-contracts: while the minister spoke about a net increase of contracts, Istat data shows a figure significantly different: 13.
2015 Lisbon (pt)
No mistakes, the number is right: it is the net difference between the contracts activated between January and February 2014 (986.870) and the signed contracts in the first two months of 2015 (986.883).
In addition to the wonder for such a blatantly marked difference, there are other considerations on the substantive nature of the new contracts. A net increase of 13 would mark a mortgage on active policies and the net impact of the generous resources (€ 1.5 billions) that Italy received from Europe in the Youth Guarantee Program. To this figure must be added that the increase in permanent contracts is surely the result of government policies: the contribution of €. 8,000 (for each new permanent contract) and the chance to fire after a year may have played a big attraction in some cases.
The general enthusiasm expressed by the government for the infinitesimal increment in the employment rate during January 2015 has to be confronted to a reality, which is still as dramatic as it was months ago, if not worsening. The comment from Luca Ricolfi (Professor of Psychometrics, University of Turin, & member EAS European Academy of Sociology) is clear:
«...the ability of the Italian government to manipulate the facts is amazing (...) we heard of "a substantial & progressive employment growth in the last year" (...) still we heard that the increase in unemployment is not significant because it "must be related to the growth in the number of people looking for work." In other words: the government declared that the increase in the unemployment rate is positive because people are not discouraged anymore & “come back to look for work." (...) The tricks used to manipulate the facts are ... so naive & old that some of them are taught at the university under the title "How to do a bad search" (...) »
Into a prospectic & historical data analysis, the few decimal increment of occupation of the very last month is not sufficient to take a rest: on one side the average unemployment rate is the same of 1977, while the recent increment seems to be more connected with the turning of full-time contracts to part-time, which means a general impoverishment, & not a step out of the crisis; this is confirmed by the correlation between the incidence of poverty with the growing number of family members
The template shows the constant increment of the main employment items over the last four years. Focusing on an historical analysis, it is relevant to consider reality in term of a process, & not only as an emergency occurring from time to time.
This is pertinent both in term of methodology & in general sense. As what is usually so-called the “crisis” is going on at least until 2008, it is not temporary & occurrent, but it is becoming “normal”: it has the characteristics of a process of normalisation.
The pictures enlighten how the process is about normalisation of the general impoverishment, & how it is somehow related with the decrement into welfare & social funds.
The decrement of resources for social policies & welfare measures has the same movement of the decrease of available work-places. It seems to tell something about the blindness of on-going policy makers; about the failure of the austerity measures in supporting &/or fostering the economy, & instead their success in strengthening the stronger & wealthier while depressing the majority of the population.  
The ratio arising from the previous picture is quite similar to the share of global wealth between the top 1% & the bottom 99% of the world population, as shown in the following picture: the work-places & social funds decrement has the same direction of the decrement of wealth of the majority of population, while the increment of poverty seems to have the same growth as the increment of wealth of the wealthiest minority.
These “suggestions” are confirmed by the more recent data on poverty in Italy, which show a significant increment of relative poverty (+5%), & a triple-increment of the absolute poverty (+16%) between 2013/2014:
relative poverty: 16,60% (it was 15.8% in 2014, +5,06%)
absolute poverty: 7,9% (it was 6.8% in 2014, +16,18%)

the impact (?) of “anti-ciclic” measures.
The data & impact analysis of the so-called “anti-ciclic measures” shows a dramatic lack of perspectives, solutions & support for the most deprived part of the population.
2015 Lisbon (pt)
The contribute of €. 80 introduced in 2014 by the government is a monthly contribution, presented as the “new” way to reverse the austerity measures meanwhile supporting the most disadvantaged. In truth it is quite different: this monthly contribution is NOT effecting at all the most vulnerable & deprived. It is addressed only to permanent & long term employees. It means that VAT-holders, pensioners, unemployed, NEETs, poor & inactive are all excluded; furthermore, even between employees, the lower income workers (less than €. 8.000/year) are excluded. The general evaluation of this measure is of a marginally positive net impact in 2014 & a cumulative net zero-impact over the next two years for the balance with the negative effects arising from the safeguard clause, with the possible VAT increase” (data from CGIA – SMEs Association).
On the other side, the government introduced the SIA (Support to Active Inclusion) with a general budget of 887 millions euro covering the period 2014/2016. This measure is targeted to the most deprived (those under absolute poverty), with a real impact of an average €. 5 per month:
€. 887 millions : 4,8 million people) : 36 = €. 5
(total budget : Target in absolute poverty) : duration in months = average €. per months per person
2014 Valencia (es)
With such numbers, the impact of these 5 euro per month is equivalent to the national lotteries slogan: "your life could turn", and "play responsibly, the game generates addiction".
In this gloomy scenario, in the same period, the local taxation on primary goods raised up impressively: water +3,9 in 2014 & +4,8 in 2015; gas +5,4; electricity + 1,7 (ref.: National Authority for Energy)
Again, Luca Ricolfi general comment is very clear: « Italy the left-wing primarily protects those workers who are already guaranteed. The right-wing has always been focused on the self-employed. As for everyone else (temporary & illegal workers, youth & women out of the labor market) no one cares seriously, least of all the unions...»
The "job-act" represents the new legislative framework relating to work, & responds in a manner substantially consistent with the official slogan: "to create more workplace we need to dismantle labour-protections." I leave the comments to the many who have spoken. Instead, I think it is rather interesting to analyze a proposal developed by Professor Ricolfi, who good-naturedly called "job-Italy", & that, except for occasional exceptions, has been essentially ignored by the mainstream media.
The idea seems to be simple: there is a mathematical value which makes it real for companies to create new job-places, for workers to receive 80% of the cost of doing business rather than about 50% (average taxation on contracts 44%), for the state to maintain the same cost/benefit balance while maintaining the existing protections.
The operation is mathematical: companies that increase employment may use solely for the additional created job-places and for a maximum of four years, a special full time contract in which the worker receives in payroll 80% of the cost of doing business, while the remaining 20% flows to the state, in the form of income tax and social contributions. The scheme is as follow:
  • the paycheck is between 10 and 20 thousand euro per year
  • the additional cost of doing business than the paycheck is 25% instead of 100% as today
  • the offer is limited to firms that increase employment, & lasts from 1 to 4 years
  • the difference between labour-cost & corporate paycheck is used to pay the income tax payable by the employee
The Ricolfi framework is not a reduction of the public revenue even if the new contract-framework greatly reduces (to approximately 30%) social security contributions. A simple template clears it up:
    2015 Lisbon (pt)
  • 10,000 euro net annual payroll
  • the worker receives 12,500 euro gross divided as follows: 
  • €. 10,000 in salary
  • €. 700 personal income tax (IRPEF)
  • €. 1.800 retirement & social security purposes (INPS)
  • giving the government-estimated 100.000 new jobs in 2015, with actual rules the State will collect around 1 billion euro in social contributions & about € 2 billion in other taxes
  • total State revenue: 1 + 2 = 3 billions
The employers national associations declared the intention to double the new-jobs placement in case of a decrement in labour costs. If the new-job places shift from 100 to 200.000, the revenue contribution becomes very small, while the yield of the other taxes changes from 2 to 4 billions. Total state revenue: 0 + 4 = 4 billions

The solution is to use 2 of the 4 billions to ensure a full contribution to all workers. The 2 billions that advances, corresponds exactly to what the Public Administration received before in the form of other taxes. But with twice the number of new contracts with higher salary and same rights.
Despite this framework has been studied & evaluated worldwide, it has been substantially ignored in Italy; maybe it is because the Ricolfi framework requires a degree of mental flexibility that seems a bit excessive to ask to those involved in national public affairs to foster flexibility into the workers.

Net migration: the response of Italy as the DDR of the late '80s
The number of young Italians going abroad, so-called “our” emigrants, exceeded for the first time since ages the number of immigrants landed in Italy. Mathematics gives glimpses of reality: in 2013, 94.126 people have emigrated from Italy, with an increase of 15% compared to the 78.941 persons in 2012. These are substantially similar numbers to those that preceded the fall of the GDR, when in 1988 about 40 thousand East Germans abandoned the DDR, followed by another 116 thousand a year later.
2014 London (uk)
Paradoxically, there are not only similar numbers (even if the proportion between the states population suggests italian is more statistically significant), but also similar words. In 1988 the leadership of the GDR called “deviant citizens” those who were leaving, refusing to receive & consider the demands of open dialogue with citizen. In 2015 we read public declarations saying that local governments are not entitled to sit in dialogue with who doesn't accept the cuts to the rights of citizens; that investments in “great infrastructure” must continue regardless of corruption; that the increase in unemployment is a sign of optimism, or still that young individuals that moved abroad are considered as a "lost challenge".
Using the paradoxical analogy with the anniversary of GDR fall is intentional to remember what means are determined by certain positions, & what directions are taken when bunglers talks can not learn from history.

Youth Guarantee v. being young & homeless
The enormous amount of available resources (1,5 billions euro) has been divided by different Regions, which are responsible for the development of the programme.
repeat the being part, the having one we already know
2015 La Spezia (it)
Unfortunately, the general progression of the use of YG funds seems far from being relevant from the Regional dedicated websites, as various Regions allocated funds to promote different items. Taking a given Region as an example, it offers “training & informative events” associated with the list of allocated resources: acceptance & taken in charge (8,8 millions), training (44,5 millions), tutoring (12 millions), apprenticeship (30,8 millions), national civil service (1,2 millions).
Right to housing, social housing & housing first
Despite the differences between these terms, Italy is driving through a narrow path in quite a slippery scenario. While the HF seems to become hip between institutions & service providers, the data shows a dramatic contraction of the right to housing.
Reality tells a different story than the intentions & proclaims: the national priorities moves from welfare to big contracts, which harbingers the corruption, while the overall situations of individuals & families experiencing social exclusion is getting worse on a daily basis.
The latest data shows that the incidence of poverty for a family of two people is about 12.7%; it comes to 15.7% with one child; it rises to about 20% for families with two children; it increases to 28,5% for 3 or more children.
There is a direct inverse relationship between the increase of rates relating to poverty, marginality & emigration, with the decrement of resources for welfare policies. Again, the picture is depressing:
  • Regional Fund for welfare measures for families & minors: from 929 millions to 313 milioni: -66,30%
  • National Fund for childhood and education policies:from 44 millions to 28 millions:-36,40%
  • National Fund to support deprived families: from 346,5 millions to 20,9 millions: -94,00%
  • National Fund for Equal opportunities: from 64,4 millions to 31,4 millions: -51,20%
  • National Fund for youth policies: from 130 millions to 16,8 millions -87,10%
Regarding the housing policies, again the data speaks for themselves:  
  • there are 650.000 unattended requests for social houses
  • the government estimates an average number of 70.000 new evictions each year
  • the last allocation to social housing policies dated back to 2007, with the allocation of 500 millions euro; the following year, the government turned those funds to support private housing market
  • it is almost a decade without any policies on social housing, & without any allocations of funds
 I live on my feet
2015 Genova (it)
While some HF initiatives are arising in local contexts, the overall scenario is somehow supervenient: if there is a limitation of the boundaries of the right to housing in term of reality check, than the road to a comprehensive housing policy becomes far & slippery. 
As a colleague of mine clearly reported, «... if I use the word “rose”, I mean there are petals, thorns & stems; if it has ears, hair & wags the tail, I still like it a lot, but I call it a “dog” ... »

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