Interview
Oxfam: The Italian government reinforces poverty traps
'The government’s opposition to the legal minimum wage was a very telling choice. There is a deep disinterest in protecting the least-protected workers, employed in sectors where union strength is minimal.'
Oxfam’s inequality report shows how recent crises have increased social inequality. We spoke with Misha Maslennikov, a policy adviser for the organization.
Why is abstention growing and why are the people voting less attentive to this enormous problem?
Because disappointment in the worsening of one’s living conditions and a sense of abandonment by those who should have – but failed to – take charge of citizens’ problems are both growing. And the dissatisfaction of people and territories that “don’t matter” is growing. This fuels abstention and the appeal of populist and extreme political proposals. It also leaves room for political entrepreneurs of fear. Unfortunately, hope would be misplaced at this point. The new political course begun with the Meloni government is rewarding already advantaged communities and individuals and is far from featuring a tenacious fight against poverty and inequality.
You have launched the #LaGrandeRichezza signature collection in support of the European Citizens Initiative (ECI) for a progressive tax on large estates. Are you sure that the Europe we have, which is likely to go further to the right in June, wants and is able to pass one?
We were asked a similar question in the past, when we insisted on the need to counter the tax avoidance practices of large corporations by ensuring an appropriate level of taxation of transnational giants. Those demands have been met at the institutional level: more than 140 countries have agreed on the global minimum tax. If governments were able to reach agreement on this tax, I don’t think it would be utopian to move forward on the taxation of large fortunes. It serves to strengthen the sustainability of tax systems and to reconcile globalization with greater tax justice.
The Meloni government financed the tax cut (the “fiscal wedge”) by ultimately increasing the deficit in the budget law. Where is the economic rationality in such a measure?
Introduced in 2022 in response to inflationary pressures, the measure provided support to the most vulnerable workers with low and middle incomes. However, it has also resulted in poverty traps at the two income thresholds which define it. It risks disincentivizing work and encouraging people to report income within the thresholds under the relief. It can also negatively impact contract renewal agreements and has a high cost to public finances. Careful consideration must be given to whether or not the conditions that made the “decontribution” necessary still exist. Instead, if supporting lower wages is the objective, it would be more appropriate to consider less distorting instruments.
Has the cost-of-living crisis been effectively addressed?
Policies against the soaring prices have focused on short-term compensatory measures for businesses and households. For households, attention has been paid to the most fragile households, whose vulnerability persists over time. For economic operators, tax credits have supported energy-intensive businesses, but without provisions for investment plans or restructuring that would increase their energy efficiency and without any conditionality for environmental sustainability or industrial relations. And aid has not been tied to work contract renewals to encourage the recovery of purchasing power.
Poor-quality jobs are rampant. How much have labor policy “reforms” weighed since the 1990s in Italy?
Undoubtedly, the spread of poor-quality jobs and the growing wage inequality are attributable to the flexibilization policies of the past 25 years, which have led to a gradual reduction of constraints on employers, now free to hire workers with atypical contracts. Also playing a role in the increase in poor-quality jobs are the country’s long-standing deindustrialization, the unwillingness of small and medium-sized enterprises to invest in workers, and competition based on squeezing labor costs.
Is the Meloni government planning to change course?
The opposite, in fact. The absence of a clear industrial policy geared toward creating good jobs is an abandonment of the task of countering the weakening of the economy and changing the direction of the country’s development towards technology and the environment. Further liberalization of fixed-term contracts and casual work risks reinforcing the trap of precariousness. The government’s opposition to the legal minimum wage was a very telling choice. There is a deep disinterest in protecting the least-protected workers, employed in sectors where union strength is minimal.
How do you explain the elimination of the citizenship income for 500,000 people?
This is the result of the government’s categorical approach. It’s no longer enough to be destitute to get continued support, but one also has to fall within a category considered exceptionally disadvantaged. Those who don’t belong to it, even if they’re in need, will have to fend for themselves, almost completely on their own. They are considered to be able-bodied poor persons who no longer have any excuse for not accessing the labor market. It doesn’t matter that they’ve been away from it for a long time, that they have no monetizable skills or that employment opportunities are lacking.
Originally published at https://ilmanifesto.it/alla-fiera-di-davos-le-disuguaglianze-oscene-del-capitale on 2024-01-16