Tackling inequality is not among the next government’s priorities, according to a report by Oxfam and Development Finance International (DFI), which analyzes fiscal, labor and welfare (education, health and social protection) policies in 161 countries during the first two-year period from the start of the pandemic.
While the new majority’s plans for dealing with the high cost of living and of energy are not yet known, its electoral programs on tax, labor and public spending policies “do not portend a growth of the redistributive reach of our tax system, robust interventions geared toward promoting adequate minimum wages, combating in-work poverty, or redesigning universalistic public welfare,” according to Mikhail Maslennikov, policy adviser on economic justice at Oxfam Italy, who said the underestimation of the economic and social gaps tearing Italy apart should “raise alarm.”
It is no mystery that a minimum wage has never been a favorite policy of the future premier, who, at a campaign stop in Cosenza, called it a “bait and switch.” According to Meloni, such a measure would only be “a weapon of mass distraction,” given that a large part of the salaried workers – minus the three million in the excluded category – fit into categories already covered by national collective bargaining agreements.
Italy is one of the countries analyzed by Oxfam that have not increased minimum wages in the 2020-2021 period. For these countries, in-work poverty has reached record levels, while today soaring inflation is eroding workers’ purchasing power. Furthermore, even in advanced economies like the United States where it exists, the federal minimum wage has remained unchanged since 2009.
Maslennikov also said he was “concerned” about the fate of the citizenship income, “which, instead of being made a more equitable and efficient anti-poverty tool, risks being eliminated altogether.” The measure, rather than being eliminated outright, could be neutralized. In Meloni’s plans, it would be restricted only to the over-60s with no income, the disabled and families with dependent children. Half of the current recipients – those between 18 and 59 years old and able to work – would be cut off.
The tax policies announced by the incoming majority are also concerning. Fratelli d’Italia, Forza Italia and the Lega have three different “Flat Tax” plans, for example. In this regard, Oxfam calls instead for a change in policy and a “tax the rich” approach, quite the opposite of what happened during the 2020-2021 pandemic period, when governments refused to increase taxation on higher incomes or assets or pass any extraordinary tax on the extra profits of multinationals in the pharmaceutical or online trade sectors. Those were major sources of funding which today could have helped those suffering the most from the crisis.
In Italy, “emergency welfare” interventions have temporarily mitigated the explosion of inequality, but without changing the fundamental situation. In 77 low-income countries out of the 161 analyzed by Oxfam, interventions have proved totally inadequate. Half the countries cut health and social spending, and 70% of the countries reduced education spending. It was a decision made so as not to affect public debts, the interest on which is difficult to repay in times of crisis like nowadays.
“For every dollar spent on health, developing countries are paying $4 in debt repayments to rich creditors,” argues Matthew Martin, director of the DFI. “Comprehensive debt relief and higher taxes on the rich are essential to allow them to reduce inequality dramatically.”
