The rise of prices energy and gods foodstuffs it blew up the cost of living in advanced countries. Hitting heavily especially those who have lower incomes and already usually spends a considerable portion of its earnings on basic necessities. Moreover, there is no sign of the vicious circle between price and wage increases feared by central banks. The analysis comes fromOECDwhich in the new report Employment prospects 2022 points out: “The structural changes that have occurred in labor markets in recent decades – removal of indexation and increased market power of employers – mean less upward pressure on wages. This left the low-income groups more exposed to declines in real wages“. Among the countries where the decrease in purchasing power is more pronounced is Italy: “L‘OECD provides that i real wages they will come down of the 3% in Italy in 2022, a figure higher than that relating to the average of the countries of the OECD area, equal to 2.3% ”.
“It is essential to support real wages for underpaid workers,” reads the OECD commentary note. “Governments should consider ways to adjust the statutory minimum wagesin order to maintain effective purchasing power for low-paid workers. Targeted and temporary social transfers to the people most affected by the increase in energy and food prices, they would also help to support the standard of living of the most vulnerable ”. The Secretary General of the OECD, Mathias Cormannhe remarked that “the flare-up in food and energy prices has devastating consequences, in particular, for modest families. Despite notable shortage of manpower, real wage growth does not compensate for the current inflationary push. In this context, public authorities should adopt targeted support measures ”. According to Cormann, “this would allow us to help the most needy families and businesses, limiting the effects of inflation as well as the cost of such interventions”.
The labor markets of the OECD countries resumed “with vigor after the pandemic from Covid-19but the world prospects on employment are very uncertain today “: this is the warning launched by the OECD, which recalls how” the war of aggression conducted by Russia versus Ukraine weighs on world growth and fuels inflation, with negative consequences on investments of companies and on consumption private “. According to the Employment Outlook 2022, “employment growth may soon slow downwhile sharp increases in energy and commodity prices have sparked a cost of living crisis“.
In Italy, the impact of Covid on the labor market has been mitigated by the extensive use of layoffs. The labor market continued to improve in early 2022, and the unemployment rate it dropped to 7.9% in July 2022, in any case well above the OECD average of 4.9%. In June 2022, the employment rate stood at 60.1%, 1.1 percentage points higher than in December 2019. The increase in employment was greater for men (+ 1.2%, at 69, 1%) than for women (+ 0.9%, to 51%). Regarding the vacancy rate, Italy reached record highs in the second half of 2021, stabilizing around 1.9 in the first quarter of 2022. Particularly pronounced in the food and hospitality sector, where it reached 3% in the first quarter of 2022. Despite the tighter labor market work, nominal wage growth remains weak in Italy.
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The OECD report: “In Italy this year real wages will drop by 3%, more than the average. Inflation has devastating consequences” – Il Fatto Quotidiano
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