By Eric J. Lyman
ROME, March 8 (Xinhua) -- So far, Italy's Jobs Act, a set of labor reform initiatives that might be the central achievement of the two-year-old government of Italian Prime Minister Matteo Renzi, has been a mixed bag. Experts say that is not likely to change in the near term.
The Jobs Act dismantled Article 18 of the Italian Worker's Statute, which made it very difficult for any company with more than 15 employees to fire workers.
Designed to help give a typical workers more job security, the act comes after mounting criticism about the polarization of the labor market between the security enjoyed by workers who are employed on indefinite contracts and the vulnerability of those who are not. It has applied to those who started work on or after March 7, 2015.
The majority of economists agree that by making labor markets more flexible and transparent, companies would be more likely to hire new workers because a new hire becomes less of a long-term commitment. Previously, Italy's labor market earned criticism for being too rigid, forcing companies to offer workers temporary contracts to avoid having to offer the worker a contract for life.
So far, unemployment figures have improved slightly: in 2014, before the Jobs Act was implemented, Italy's unemployment rate was 12.7 percent. At the end of last year, it had improved, dipping to 11.4 percent, though still far above the 8.4 percent level recorded five years ago.
But those modest gains have come at a price: in January, the number of Italian companies seeking to lay off workers rose 12.8 percent compared to the previous month, after falling for most of 2015. And data from Italy's national statistics institute, ISTAT, shows that industrial output is still growing faster than employment rates, indicating there is still excess capacity in the economy.
"The Jobs Act was a positive idea, but it really should have been done years ago," LUISS University professor Paolo De Nardo, an expert in legal and industrial relations, said in an interview. "It's a harder reform to follow through on in an economic crisis."
De Nardo said Italy's slow economic growth puts downward pressure on wages, meaning that many of the new jobs have low salaries. When this happens, there isn't "the immediate impact the government would like," De Nardo explained.
But Marco Leonardi, an economist at the University of Milan, said it is better for short-term developments like the rise in claims for the "cassa integrazione" (unemployment insurance).
"Things go up or down from one month to the next," Leonardi told Xinhua. "It's wise not to pay too much attention to that, but to look at the long-term trends. I think it's still too early to see any long-term trend emerge from the Jobs Act." Enditem
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