Labour Day, from contracts awaiting renewal to the purchasing power of wages, here are the challenges

Growth in employment but wages not always in line with the cost of living. Italians are preparing to celebrate Labour Day, the first of May. A labour that does not lack challenges. "We all know how wage issues are fundamental for the reduction of inequalities, for a fair enjoyment of the fruits offered by innovation, by progress," the President of the Republic Sergio Mattarella stressed in recent hours. "So many families cannot stand the rising cost of living. Insufficient wages are a big issue for Italy,' added the Head of State, visiting the company BSP Pharmaceuticals S.p.a. in Latina on the occasion of the Labour Day celebration.

On the one hand, the world of work is seeing positive employment signals; on the other hand, however, these positive signals are limited and mainly related to the over-50s, with industry struggling with unresolved historical knots: from low productivity to low participation of women and young people, to the issue of wages and housing for out-of-work people. Italy remains at the bottom of the league table internationally in terms of employment rate, young people without jobs, young people who do not study and do not work (Neet), school drop-outs and number of graduates. Companies have difficulty in finding the right skills, a 'mismatch' that costs 44 billion in lost added value, equivalent to 2.5 points of GDP.

Some indications of the challenges affecting the labour market emerge between the lines of the latest Istat report on collective agreements and contractual wages for the period January-March 2025.

The first challenge is represented by contracts awaiting renewal. At the end of March 2025, the statistics agency explains, there are 35 and they involve around 6.2 million employees, 47.3% of the total. In particular, agreements relating to energy and oil mining, paper and papermaking, cement, cale and plaster, Fiat, electricity, gas and water, waste disposal service private and municipalised companies, air transport-vectors, car garages and car hire, private radio and television, insurance and local cleaning have expired. For the public administration, the three-year period 2022-2024 has expired. The survey on contractual wages makes it possible to estimate the share of national collective labour agreements that would remain in force in the six-month period April-September 2025 in the hypothesis of no renewals; this share would decrease from 50.5% in April 2025 to 48.4% in September.

The second challenge is that of recovering the purchasing power of wages. In the first quarter of 2025, Istat recalls, the trend growth of contractual wages remains sustained in the private sector and is decidedly more contained in the public sector. In real terms, a further recovery is observed with respect to the loss of purchasing power that occurred in the two-year period 2022-2023, which nevertheless still remains large: for the total economy, real contractual wages in March 2025 are still about eight per cent lower than in January 2021. Lower-than-average losses are observed in agriculture and industry, while more unfavourable situations are seen in private services and public administration.