A-Infos (en) Italy, FAI, Umanita Nova #8-26 - Eternally poor. Falling wages, poverty, and precarious employment (ca, de, it, pt, tr)[machine translation]

"Austerity and low wages have compressed domestic demand. We sacrificed 
public spending and compressed our wages. We thought that to compete 
with other European countries, we had to keep wages low as a competitive 
tool. Meanwhile, we continued to become increasingly poorer, so perhaps 
austerity wasn't the right strategy." ---- (From the Senate hearing of 
Mario Draghi, former Director of the Treasury, former Governor of the 
Bank of Italy, former Governor of the ECB, former Prime Minister, March 
15, 2025.)

It is now common sense that poverty in our country is constantly 
growing. The 2024 Istat data (the latest released) are very clear on 
this point: 2.2 million families, including approximately 5.7 million 
people, are in absolute poverty; 2.8 million families, including 8.7 
million individuals, are in relative poverty. All the numbers are up 
compared to the previous year, 2023. These are impressive figures, taken 
together: they indicate that 5 million families, at various levels, are 
poor. These families represent a total of 14.4 million people, or almost 
a quarter of Italians.

Compared to ten years earlier, in 2014, the absolute poor have increased 
by approximately 1.5 million and the relative poor by over 1 million.

To these already dramatic figures we must add the people who are "at 
risk of poverty," that is, those who are on the brink of the abyss and 
on the verge of falling into it. But why did a social disaster of this 
magnitude occur?

A concise answer to this question can only be based on two elements: the 
decline in wages and the precariousness of work.

Many statistics have now been released on the decline in wages, some of 
which have become famous. The 2022 OECD report finds that Italy is the 
only country where, since 1991, real wages have fallen by 2.9% over the 
past 30 years. The ILO's 2025 World Wage Report, meanwhile, highlights 
that the purchasing power of Italian wages has fallen by 8.7% since 
2008. More recent data include the ISTAT report for 2021-2025, which 
states that Italian wages have fallen on average, in real terms, by 
around 9% over the last four years of rising inflation.

Price tensions and soaring energy prices have been the main cause since 
the outbreak of the war in Ukraine, but the same risks repeating itself 
with the Israeli-US attack on Iran: a prolonged conflict could cause a 
more than temporary increase in the cost of gasoline, diesel, gas, and 
therefore electricity. The inflationary effects already in sight could 
be compounded by a sharp contraction in production and employment, 
resulting in further job losses.

This brings us to the second factor contributing to low wages: job 
insecurity, blackmail, the fear of rebellion, and the inability to 
escape the need to work to survive.

What's new compared to the past is that even those who have a job are 
often poor.

The government boasts a record employment rate, with over 24 million 
active workers at the beginning of 2026, but forgets to mention that 
there are another 12 million "inactive" workers: those who don't have a 
job, are losing it, or are so discouraged they don't even look for one.

The increasingly serious emergency is that of the working poor, workers 
who, despite having a job, are unable to escape poverty. According to 
the latest data reported by Unimpresa, in the first quarter of 2025, 
over 3.2 million people in Italy, despite having regular employment, 
were living below the relative poverty line. This figure represents 
approximately 14% of employed people, up from 13.5% in 2024.

It's no longer just delivery riders or seasonal workers: today, in-work 
poverty primarily affects young people under 35 with atypical contracts 
(28% of the total), low-skilled service sector employees (23%), and a 
growing share of self-employed workers (19%), particularly small 
business owners and artisans, who are being squeezed by price increases. 
It's not just Glovo and Deliveroo delivery workers, who are under 
judicial scrutiny for gangmastering following the investigations by 
Prosecutor Storari, but also the fake VAT numbers that keep the advanced 
service sector afloat.

Precarious contracts and the high cost of living are particularly 
burdensome: as Unimpresa further notes, 61% of the working poor have a 
net monthly income of less than EUR1,100, while 38% earn less than 
EUR800. This situation is particularly dire in the South, where the 
phenomenon affects 22% of employed workers compared to 12% in the North. 
And if we only look at the data for the islands, the situation is even 
worse.

The government has significantly contributed to this critical situation: 
the abolition of the Citizen's Income and its replacement with the 
Inclusion Allowance has forced a growing number of workers to accept 
more precarious and underpaid jobs. The EUR4 billion cut in resources 
earmarked for the Citizen's Income has further worsened the overall 
poverty situation.

While the Citizen's Income reached an average of between 1 and 1.5 
million households, the Inclusion Allowance reaches just under 760,000 
households, to which must be added the approximately 100,000 individuals 
entitled to Training and Work Support.

More precisely, according to ISTAT calculations, the replacement of the 
Citizen's Income with the ADI-SFL combination has led to a deterioration 
in disposable income for approximately 850,000 families, equal to 3.2% 
of families resident in Italy. The average loss for these households was 
EUR2,664 in 2024 and affected almost exclusively the poorest segment of 
the population.

In three-quarters of cases (620,000 families), the household completely 
lost its right to benefits, while the remaining quarter of households 
(230,000) were disadvantaged by the new method of calculating financial 
support.

In short, the Meloni government's war on the poor was a resounding 
success, winning across the board. The outright rejection of the minimum 
wage debate was the icing on the cake.

A corollary to this ferocious social policy was the so-called tax wedge 
reduction, which until 2025 followed the Conte-Draghi line, returning a 
few dozen euros per month to low-income workers (under EUR28,000) by 
deducting them from the personal income tax of other workers. Since 
2026, however, the wink to the "middle classes" has translated into a 
two-point cut in the second tax bracket, saving taxes for workers and 
the "less poor" taxpayers-those earning EUR28,000 and above (though in 
reality, those earning more are those earning EUR40,000-50,000).

It's therefore not surprising that the Gini inequality index has risen 
in Italy, too, since redistribution occurs in reverse, taking from the 
poor to give to the rich.

Draghi is lucid in describing the causes and effects of the disastrous 
policies he has always advocated and defended. As a good strategist of 
capital, he senses the emptiness of this strategy and the fundamental 
failure of the liberal and free-market model, which is no longer able to 
deliver on its promises. The prospect of an inclusive society, supported 
by a sustainable welfare system, has become a pipe dream for a West 
besieged by stronger and more determined competitors in the fight for 
survival. Despite the sacrifices and austerity imposed on the lower 
classes, the model has failed in its pursuit of global competition, due 
to a lack of investment, delayed research, blind faith in the market, 
and ordo-liberal privatization.

The exploitation of domestic labor and the predation of external 
resources are no longer sufficient to ensure the reproduction of capital 
adequately to the needs of competition. It will be interesting to see 
how they plan to emerge from this black hole: a return to war as global 
hygiene?

Renato Strumia

https://umanitanova.org/eternamente-poveri-crollo-dei-salari-poverta-e-precarizzazione/
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