Wages: enough of chasing inflation – guarantees must be included in contracts

An agreement between trade union confederations and employers’ organisations must resolve at least two issues that can no longer be put off. The first is the certification of representation; the second is a contractual model capable of protecting wages against inflation. These are two fundamental issues, but with very different timeframes for resolution. And it would be a mistake to sacrifice what can be done immediately whilst waiting for reforms that will take years.

For thirty years, the Italian system has relied on ‘self-certification’. The 2014 Consolidated Act had paved the way for measurement, but the process came to a halt halfway through. Today, attempts are being made to complete it once again through a self-certification agreed between the parties. But this is not enough. A certification based on self-assessment of one’s own weight remains merely a declaration of good faith.

The measurement must be independent, public and verifiable. It must also cover the employers’ side; otherwise, the assessment remains incomplete. If the parties are unable to carry this out independently – and after twelve years of waiting, it is reasonable to doubt this – a law is needed. A law that does not replace collective autonomy, but defines the certified framework within which it is to be exercised. Article 39 of the Constitution has been waiting for almost eighty years.

The second issue is inflation, which is once again a cause for concern. It is here that the potential agreement reveals its greatest vulnerability. In 1993, the Ciampi Protocol provided for a two-year national collective agreement on economic matters, as inflation needed to be closely monitored. Today, many renewals are for three or four years, with reviews that often take place only once the damage has already been done. Meanwhile, price surges are hitting the shopping basket far harder than the HICP (excluding imported energy, the benchmark used in negotiations) indicates. Saying that we need to go beyond the HICP sounds good, but many contracts have not even managed to make up for past inflation (as indicated by the HICP). Before going any further, we should at least catch up with that. Nor are the automatic provisions introduced by law for contracts that have been expired for more than nine months particularly convincing.

There is a contractual alternative that has already been tried and tested. The 2016 metalworkers’ collective agreement introduced a guarantee mechanism that adjusted minimum wages in line with actual inflation figures once the figures were finalised, without waiting for the agreement to expire. It worked, and for this reason it should be rolled out more widely, particularly in sectors that have lost the most purchasing power: retail, tourism, logistics and the hospitality sector.

This guarantee clause is probably the only measure in the protocol capable of producing real and immediate effects on wages and can be incorporated directly into the 2027 contract renewals, thereby preventing further losses in purchasing power. The portion of the protocol dealing with representation certification remains fundamental, but even an agreement between the parties would likely require legislative intervention and could lead to a lengthy period of legal challenges before having any practical consequences.

Another point concerns the structure of collective bargaining. We need a model that truly decentralises negotiations whilst simultaneously strengthening the national collective agreement as a framework of guarantees, establishing minimum standards, rights, universal protections and safeguards for purchasing power. The decentralised model, on the other hand, links wages to productivity, the organisation of work and company performance. Today, however, supplementary collective bargaining remains largely inaccessible to millions of employees in small businesses. We therefore need investment in regional collective bargaining for small businesses, supported by bilateral sectoral bodies, support mechanisms and effective tax incentives.

A new policy must have long-term ambitions, but also deliver immediate results; the priority today is to prevent a new bout of inflation from causing another permanent loss in real wages.

Let’s end on a potentially positive note. The Tertiary, Distribution and Services collective agreement, which for the first time has a single negotiating table, is set to be renewed before its expiry date. This hasn’t been seen in Italy for some time and is worth more than many declarations of principle. Renewing before the expiry date would be the real breakthrough. When the parties take responsibility for doing so, without waiting for an automatic mechanism to do it for them, it marks a step forward that could prove crucial.