In Italy, pressure builds to overhaul wage system
Wall Street Journal
28 Aprile 2008
ROME - Steel magnate Emma Marcegaglia, the new head of Italy's powerful Confindustria business association, is planning to put a shakeup of the country's antiquated wage system at the top her agenda.
Her plan, which aims to tie salaries more closely to productivity at a company level, would go a long way in helping to increase the competitiveness of Italian companies and the wider economy if it succeeds.
Italy remains one of the few countries in the world in which a centralized national wage bargaining system covers all workers and often prevents private sector companies that are more productive from paying higher wages. The problem extends to Italy's vast public sector, where a civil servant working in the richer north of the country is under the same national contract as one in the south, even though the cost of living differs widely.
The Italian economy has grown more slowly than the 15nation euro zone average for a decade, and it might even fall into recession this year amid the global slowdown. Poor labor productivity is a big part of Italy's problem; Italian workers are the least productive among the 30 developed nations included in the Organization for Economies Cooperation and Development.
Presenting her plans last week, Ms. Marcegaglia called the current wage bargaining system "inadequate and obsolete" and said she would focus on "modernizing contraets" so that Italy can better compete in the world. Ms. Marcegaglia, who is due to take office May 21, also called for business friendly tax changes and revamping Italy's justice system to ensure shorter trials, and later discussed those plans with Premier elect Silvio Berlusconi.
Unions are expected to oppose the plans, as they did with similar proposals from her predecessors. But some analysts say she may have a better chance, after a huge defeat for leftist parties in Italy's recent election, which helped return Mr. Berlusconi's 11 Mici light government to power.
"Change may finally be possible: Unions are weaker and [Marcegaglia's] priorities match those of Berlusconi," said Giacomo Vaciago, a professor of economics at Milan's Cattolica university.
Italian labor unions have long been against changing the centralized pay system. But some union leaders are starting to soften their views after recent blows from national elections and the continuing Alitalia crisis, in which unions have been blamed for rejecting Air FranceKLM's takeover bid, the only viable option that remained for the ailing carrier.
"I really believe in Emma Marcegaglia....We must now join our efforts to build a new contractual model that can better distribute wealth between companies and workers," said Raffaele Bonanni, the leader of Italy's Cisl union, one of the country's largest unions, which mainly includes public sector workers and pensioners.
Ms. Marcegaglia may also benefit from her reputation. The co chief of her family's steel company and the first female head of Confindustria, she has been dubbed by the press as a "woman of steel and silk," for knowing how to bring out the big guns when necessary but also having a softer side.
Source > Wall Street Journal
