Pension cuts to fund early retirement. Salvini’s short-sightedness

At the Lega Congress, the governors from the North and those party activists calling for the Carroccio to return to a role of representing and safeguarding the interests of the North had a formidable argument at their disposal to highlight the contradictions in the general political choices of the dreadful Salvini-Durigon duo, given the erosion of that very role upon which the Lega’s electoral fortunes were based. The issue was that of pensions – the spectre of Banquo that has haunted Salvini ever since he failed to ‘overcome’ the Fornero reform.

To explain the need for new forms of flexible (early) retirement, the Under-Secretary of State for Labour, Claudio Durigon, has revived the arguments that led the first Conte government to introduce – via Decree No. 4/2019 – ‘Quota 100’ and other measures that inflicted a deep wound on the public finances without, however, achieving the stated objectives. During the three-year trial period, fewer than half the expected number of workers took advantage of the scheme and, above all – a fact acknowledged even by members of the Lega – there was none of the turnover between older workers leaving and younger workers entering the workforce that had been touted in the ‘yellow-green’ propaganda of the time.

Today, moreover, that situation has changed. The extension of working life in relation to demographic trends is no longer merely a requirement for the financial stability of the system, but is increasingly a necessity for the labour market. 

Apart from the immediate issue of the energy crisis (which risks becoming structural), companies – particularly in the North – are complaining that they are unable to meet their labour needs, not only in terms of quality but also in terms of numbers, as a result of the ‘gaps’ that the falling birth rate has created in the younger generations. Recently, the CGIA in Mestre published estimates regarding workforce departures in the coming years, broken down by economic sector: just over 1.6 million private-sector employees, 768,000 public-sector employees and 665,000 self-employed workers, resulting in a replacement requirement of 60 per cent in the North-West and 56 per cent in the legendary North-East. Moreover, the figures also add up on the expenditure side, which – as a result of the depletion of the large baby-boomer cohort – is expected to rise by 2 percentage points of GDP (from 15.2 per cent to 17.1 per cent) around 2040.

In this context, devising a new ‘Quota 100’ scheme (64 years of age plus 36 years of contributions) is a senseless and, all things considered, pointless measure, because those who genuinely face difficulties at work, health issues or family problems can already benefit from a specific form of retirement set at 63 years of age with 30 or 36 years of contributions, depending on the case, whilst the data show that baby boomers are able to accumulate such high levels of pensionable service that the age requirement will become irrelevant, with an average retirement age of 61.4 years by 2026.

Demographic forecasts predict a decline of between 5 and 6 million in the working-age population by 2050 and, consequently, suggest that the most immediate response can only be an increase in immigration: This stance defies the ‘remigration’ doctrine dear to Salvini (and his former deputy secretary Vannacci), who sees the influx of foreigners – rather than Putin’s imperialist ambitions – as the real threat to our borders. Furthermore, Salvini has once again demonstrated that he does not have a clear grasp of the rules governing the pension system. When he boasts at a press conference that he has ‘overcome’ the Fornero reform by lowering the age requirement from 67 to 64, he fails to take into account that the new ‘Quota 100’ scheme does not apply to the standard old-age pension but to early retirement, for which 36 years’ service are required, whereas at 67, 20 years’ service are sufficient.

It is, moreover, a truly unfair decision to finance this operation by setting up a special fund of around 850 million euros, the funding for which is drawn from yet another cut to the inflation-linked adjustment of medium-to-high pensions. So much for protecting the middle classes: the bulk of the tax burden (66.19 per cent) falls on pensioners with incomes of 29,000 euros and above – and even more so on those earning over 35,000 euros – who pay 49.7 per cent of personal income tax whilst accounting for just 16.4 per cent of the total. This means that pensioners will effectively foot the bill themselves for the IRPEF cut on incomes above 50,000 euros included in the budget, and will even lose out a little. Where is the fairness in this arrangement, which follows the logic of punishing 100 (pensioners with medium-to-high pensions) to ‘educate’ one (who is doing everything possible to take early retirement)?