Hole risk for pensions, gap between income and expenditure

The revaluation of pensions compared to inflation increases INPS spending, while salaries and, consequently, contributions paid remain at stake. This increases the risk of creating a hole in the coffers of the social security institution, as well as that of penalizing workers who, unlike pensioners, do not recover purchasing power.

The alarm was launched by the president of INPS, Pasquale Tridico, who during a conference on wage inequalities reiterated the need to introduce a minimum wage in our country, a measure that would safeguard at least the groups with the lowest incomes, also adapting to the increase in prices. In the average of the first quarter of 2023, despite the progressive slowdown in price growth, the difference between the dynamics of inflation and that of contractual wages, according to the latest data published by Istat, remains above seven percentage points.

The research presented at the conference has photographed a country in which wage inequality between young and old but also that between low-income workers and high-income workers is growing. The gap between the wages of young and old people increased by 19% between 1985 and 2019, despite the fact that the average age rose significantly from 35.8 to 42.7 years and it is more difficult to find young workers on the market. But the situation for lower-income workers has also worsened, with those in the tenth percentile of income earning on average less in 2018 than in 1985 compared to rising wages in the 90th percentile.

The figure is also explained by a lower number of hours worked, but in fact the groups in difficult situations seem to remain on the margins of the labor market.
Tridico then pointed out that macroeconomic policies have been lacking. In recent years, he said, "we have produced bad jobs, policies have been based on employment incentives, on flexibility. But out of $22 billion spent last year on incentives, the return on employment was 0.07 percent." In recent years, employment in services has grown, especially in those with the lowest wages such as tourism and catering. "We continue to make - underlined Tridico - a bar economy".

Meanwhile, INPS awaits the commissioner as required by the decree approved by the Government. According to the draft circulated in the last hours, the director of the social security institution will be appointed by the Minister of Labor as it happens now, while the board will propose the name. All bodies, including the Director, will have a term of office of four years. The new wording, according to Tridico, "confirms that the commissionership is absolutely unjustified" and "has no justification in the face of very positive performances of the Institute".

Meanwhile, the opposition motions on the restoration of the full measure of 'Women's Option' were rejected in the Chamber, thus leaving in place the government's stranglehold that limits it for 2023 to women in a disadvantaged situation (dismissed, disabled or engaged in the care of severely disabled people).