The Contentious Politics of Unemployment in Europe

Political Claim-making, Policy Deliberation and Exclusion from the Labor Market

National Template for Italy

Simone Baglioni
Donatella della Porta
Paolo Graziano

GRACE Gruppo di Ricerca sull'Azione Collettiva in Europa and Dipartimento di

Scienza Politica e Sociologia
Università di Firenze
Italy

simone.baglioni@unifi.it
dellaporta@unifi.it
paolo.graziano@uni-bocconi.it

More details and reports can be found on this project which is funded by the European
Commission within the Framework Five programme at:
http://www.leeds.ac.uk/ics/euro/unempol/index.htm

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The Italian welfare state1

The Italian welfare state, like the Swiss, the Dutch and the Irish ones, is characterised by a
mixture of occupational and universal schemes. In these countries welfare regimes were
created as occupational models; in fact the schemes of social protection or insurance were
based on the principle of the participation in the labour market. In time, they acquired some
universal characters at the point that today, in each of these countries, at least one of the
welfare sectors, either health care or pension, has a national covering. This means that the
insurance system is not based any more on a working position, but on the principle of
citizenship (See table 1 for the evolution of the welfare systems in Italy and in Switzerland).

Table 1: evolution of the Swiss and the Italian welfare systems from an occupational regime
to a mixed one
Pension Insurance Health Insurance

Switzerland 1946 the whole population 1916 first cantonal insurance

(basic pension)
1982 dependent and independent workers
(integrative pension)

Italy 1919 dep. (income threshold) 1928 dep. (semi-compulsory)

1950 dep. (abolition of the income 1939 worker to provide for the
threshold) whole family
1957 peasants 1954 peasants
1959 artisans 1955 retired
1966 traders 1956 artisans
1969 over 1965 (income threshold) 1959 traders
1966 unemployed
1969 over 65 (income threshold)
1978 the whole population

Source: Ferrera, M., Modelli di solidarietà, Bologna, Il Mulino, 1993 (p.91).

In Italy, the pension and the health care systems received an occupational imprint since their
creation. After the second world war, the Parliament made a first attempt to reform the
pension system on a universal base (thanks to the work of the D’Aragona commission), but it
failed, like all the other endeavours of change of the system made by the centre-left parties
and coalitions ruling the country during the ‘60s. The result is that, today, the pension regime
still remains fragmented amongst occupational categories, often characterised even by

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different norms and rules. On the contrary, in the health insurance domain, an health national
service (Servizio Sanitario Nazionale) has been established in 1978. This reform has
abolished the occupational differentiations present in the health insurance sector (ibidem: 93).
The introduction of elements of universalism in the Italian welfare state has been fostered by
three elements:
1) ideological and constitutional predispositions and the creation of regional
governments, which has highly contributed in encompassing the barriers of
organisational fragmentation;
2) the formation, in the labour arena, of a constellation of actors (first of all professional
interest groups) convinced of the interest to form a unique community of risk,
sustained and guaranteed by the State;
3) a convergence among the most relevant political actors, which were able to overcome
their ideological or sub cultural differences.
However, this “injection” of universalism has been brought into a country, like Italy, suffering
from a deficit of stateness (i.e. the absence of a professional administrative apparatus). As a
consequence, its welfare system has been exposed to the risk of political clientelism,
corruption and scarce effectiveness .

Overview of the Italian labour system2

Italian labour policies represent an example of the Southern European model of employment
policies, which includes, beside Italy, Spain and Greece (Ferrera, 1993). This model is
characterised by: the prevalence of passive policies; dramatic occupational gaps among
different regions in the same country and an impressive record of youth as well as long term
unemployment.
The most relevant pillars of the Italian model of labour policies, mainly developed during the
‘40s and consolidated during the ‘60s and ‘70s, are:
1) A compulsory insurance system against unemployment which provides totally
unemployed, who have worked before, a modest cash benefit, not calculated on
their previous incomes but considered as a benefit for a minimum survival.
Moreover, up until mid ‘50s, this provision was limited to workers of the industrial
sector.

1
For this overview of the Italian welfare system we have mostly relayed upon Ferrera (1993, 1998).
2
For this overview of the Italian labour policy model we have mostly relayed upon Gualmini (1995, 1998).

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 2) A salary integration for partial unemployment (in cases of reduction of the
working time) which corresponds to 80% of the salary for a period, unlimitedly
renewable, of 6 months. For many years, also this subside has been reserved to
industries workers. Industries remain responsible for workers social security tax.
The whole system is managed by a state-controlled agency, INPS.
3) A public system of employment services. The system made labour demand and
offer meet, but employers and people looking for jobs were not mutually free to
choose each others. This choice was indeed mediated by the state. Special local
offices (uffici di collocamento now centri per l’impiego), established public lists of
job seekers from which employers had to draw off their employed following the
order of the employed position in the list. Unemployed with previous working
experiences were excluded from this mechanism. The system has changed in the
90s when industries have been allowed to engage workers by nominal
appointment.
Such a system has generated discriminations between people looking for a job but having past
working experiences and those who were searching a job for the first time, since the latter
were not subjected to any unemployment subside or benefit. The institutionalisation of this
original model of labour policies has provoked relevant consequences which still mark the
Italian socio-economic landscape: a very high youth unemployment rate (see table 2); the
impressive diffusion of different forms of irregular employment (sommerso, in Italian) which
has been calculated to represent 15-20% of GIP and to concern 3 millions working people; the
spreading of the phenomenon called familismo, which indicates the tendency of young Italians
to leave home much later than their European homologues and to depend longer on their
families to survive. Indeed, in Italy, in line with the general features of the South European
Welfare State model, family is the “institution” which has played, more than others, the role
of social shock absorber (ammortizzatore sociale) for generations of young people struggling
to find a regular (or irregular!) job.

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Table 2
Unemployment rates by class of age, geographical distribution and gender.
Year 2000, percentages.
CLASS OF AGE
15-24 25-34 35-54 55-64 65 and more Total
NORTH-WEST
Men 12.4 4.0 1.6 2.9 0.9 3.4
Women 20.2 8.4 5.3 4.2 6.0 8.0
Men and Women 16.1 5.9 3.0 3.3 2.4 5.3
NORTH-EAST
Men 7.6 3.1 1.2 1.6 0.4 2.4
Women 12.9 6.4 4.2 2.7 4.6 5.9
Men and Women 10.1 4.6 2.4 1.9 1.5 3.8
CENTRE
Men 21.0 9.6 2.6 3.5 1.2 6.1
Women 32.4 14.8 6.8 3.2 5.2 11.6
Men and Women 26.3 11.9 4.2 3.4 2.2 8.3
SOUTH
Men 49.3 22.0 8.1 7.1 1.8 16.3
Women 63.1 40.6 17.1 7.6 8.5 30.4
Men and Women 55.0 28.6 11.0 7.2 3.7 21.0
ITALY
Men 27.6 10.8 3.9 4.4 1.1 8.1
Women 35.4 17.5 8.6 4.7 6.2 14.5
Men and Women 31.1 13.6 5.6 4.5 2.5 10.6
Source: Istat, Rapporto sull’Italia. Edizione 2001, Bologna, Il Mulino, 2001 (p. 40).

This model has evolved and has been modified in the ‘90s both by extending benefits and
subsides to categories other than industrial workers and by strengthening them as well as by
introducing new forms of work such as part-time, social useful jobs and other contracts which
foster training and formation of young workers (i.e. more active labour policies).
In general, passive policies have been preferred to active ones by Italian policy makers as we
can see from table 3. From the same table 3 we also note that Italy, with its 1.96 of the GIP, is
under the mean of the EU public expenditures for labour policies, which rates 3% of the GIP.

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Table 3: Public expenditure for labour policies as GIP percentages
% of GIP
Measures for employment agencies 0.08
Formation and training 0.02
Measures for juvenile employment 0.83
Unemployment benefit 0.71
Anticipated retirement 0.32
Total 1.96
Active policies 0.93
Passive policies 1.03
Source: OECD, Employment Outlook, 1996 (Cit. in Gualmini, Elisabetta, La politica del
lavoro, Bologna, Il Mulino,1998, p.81).

In table 4 we can see how public expenditure is shared between different forms of active
policies. Training programs capture considerable resources as well as occupational incentives.
However, the national government is making an effort by directly creating new work
opportunities such as the social and public useful jobs (for a detailed chronological overview
of passive and active labour policies in Italy, see the appendix).

Table 4
Labour active policies in Italy: structure of the expenditure (billions of ITL in 1999)
Training 7.600
Occupation incentives 5.750
Direct creation of jobs (social useful and public useful jobs) 1.400
Entrepreneurship incentives 900
Other active policies 60
Source: Ministero del lavoro, Rapporto di monitoraggio sulle politiche occupazionali e del
lavoro, Roma, giugno 2000 (cit. in Lunghini, Giorgio, Francesca Silva and Renata Targetti
Lenti, eds., Politiche pubbliche per il lavoro, Bologna, Il Mulino, p.25).

Actors
Political parties, trade unions and employers organizations are the most relevant actors
bargaining with the State in the Italian labour policy making. Political parties have strongly
conditioned both trade unions and economic and industrial interests.
Up to end of the ’60s, the entire spectrum of trade unions activities, careers, resources,
strategic decisions and political alignment was controlled by political parties (Gualmini,
1995). Indeed, the Italian union movement was shaped as unitary and democratic after the
second world war, when the three major parties having struggled against fascism (Christian-
democratic party, Communist party and Socialist party), signed an agreement of union unity.

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Despite that, after three years, such a unity broke down and the union movement took the
fragmented forms it has nowadays. CGIL is the biggest national trade union, politically
affiliated to the left parties; CISL is the one considered as the Catholic and Christian-
democratic employed organisation and UIL is the expression of the smaller non religious
parties. However, the events of 1968 and 1969, which connected the union’s struggle to the
students protests, led trade unions to play a more autonomous role vis-à-vis political parties.
Trade Unions, then, started strengthening their position, also because of their increasing
membership which, indeed, doubled between 1968 and 1977 (Accornero, 1992). At the
beginning of the ‘80s, the three major trade unions were acknowledged by the State as crucial
partners in the social and economic policy making. Moreover, this new phase started a
tradition of political exchanges between government and interests groups. As a result the
policy making became distributive and clientelistic. Concertational decision-making became
more widespread in the nineties, but it remained weakly institutionalized at the national level.
However, we should notice that thanks to the trade unions strategic role the Italian system
provides for a very advanced workers protection. Indeed, the “Statuto dei lavoratori” of 1970
(workers statute) which endows with wide and meaningful guarantees for workers was
obtained thanks to the strong power and support of the trade union movement3. On the other
hand, it is exactly the strength of the trade union movement that made the Italian system
focusing on protection and guarantees more for workers than for unemployed people.
Even in the case of employers organisations we can notice a certain fragmentation as
industries and firms are organized in different bodies depending on their sector of activity, on
their size and on the nature of their ownership (Gualmini, 1995). The most relevant peak
employers organisation is Confindustria, the organisation of Italian industrialists, which has
been created in 1944 with the aim of representing “capital” both in the promotion of economic
policies and at the negotiating table with trade unions. Moreover, the close connection
between this peak industrial organisation and public powers has been clear since its
foundation. Indeed, Confindustria proposed itself as the unique employers interlocutor of both
Italian government and parliament. This has allowed political parties to penetrate the
organisation and to control it by fostering partisan and distributive policies. Relationship
between Confindustria and the political power have been particularly friendly during the II
Berlusconi government.

3
Indeed, the debate on employment and unemployment policy is currently polarized over the abrogation of an
article of this Statute, the article 18 providing for the right of the worker to be reinstated and indemnified in case

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The State has played the role of mediator between these interests groups, it had to guarantee
the exchange system undergoing the consensual and corporatist agreements at the basis of the
Italian labour policy making system. After the D.Lgs 467/97, regions have gained new powers
in the regulation of labour policies, in particular with respect to employment services
(counselling, matching labour demand and supply, etc.). Public spending in the field is
however quite low.

Policy making: Italian concertazione

The “concertazione” is a decision making process which actively engages peak employers
representatives, peak unions and the government. It is not just a bargain, since the decision is
made with the agreement of the whole three components, where State acts as a mediator
between workers and employers. The results of this “action in concert” are labour policies
which have to be agreed upon by all actors present at “concertation table”, but often it turns
that decisions are delayed and implementation is not always adequate. This is the
consequence of the peculiar configuration of both the Italian system of interest representation
and the political system. The former is fragmented into several organisations scarcely
cohesive at their internal level, whereas the latter one is not only extremely divided, but also
suffers from unstable governments, easily permeated by partisan interests. The outcomes are:
what is labelled assistenzialismo, a sort of state paternalism which makes individuals rely on
subsides instead of being participative; a diffused state intervention; the segmentation of
labour provisions along corporatist lines (see figure 1).

of non regular dismissal. With center-right parties together with employers associations in favor of its abrogation
and trade unions and center-left parties against.

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Fig. 1 The political and institutional framework of labour market regulation in Italy (elaborated
on the basis of the figure presented in: Gualmini, Elisabetta, 1997, Le rendite del neo-corporativismo, Soveria
Mannelli, Rubbettino, p.273).

System of interests Political system

representation highly polarized
fragmented and not cohesive unstable governments, easily
permeable to partisan interests

Concertazione

-Assistenzialismo;
-Diffused state intervention;
-Segmentation of labour
provisions along corporatist
lines.

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APPENDIX
Labour Forces by condition and gender.
Years 1995-1999, by thousands.
1995 1996 1997 1998 1999
MEN
Employed 13.019 13.003 13.015 13.090 13.158
Employment seekers 1.280 1.286 1.294 1.313 1.266
Unemployed 590 581 593 588 573
In search of first occupation 568 587 588 607 569
Others 122 118 113 118 124
Total labour forces 14.999 14.289 14.039 14.403 14.424
WOMEN
Employed 7.007 7.122 7.192 7.345 7.533
Employment seekers 1.358 1.367 1.394 1.431 1.404
Unemployed 385 394 402 408 407
In search of first occupation 505 524 533 545 527
Others 468 449 459 478 470
Total labour forces 8.365 8.489 8.586 8.777 8.937
TOTAL
Employed 20.026 20.125 20.207 20.435 20.692
Employment seekers 2.638 2.653 2.688 2.745 2.669
Unemployed 975 975 995 996 980
In search of first occupation 1.072 1.111 1.121 1.151 1.096
Others 590 567 572 597 593
Total labour forces 22.664 22.778 22.895 23.180 23.361
Source: Istat, Rapporto sull’Italia. Edizione 2001, Bologna, Il Mulino, 2001 (p. 164).

Employment and labour policies in Italy.

1919-1967
Passive policies - unemployment benefit (1919);
-ordinary salary integration (1945);
-extraordinary unemployment benefit (1946)
Active policies -Public system of employment (collocamento
pubblico) (1949);
-Apprenticeship (1955)

1967-1979
Passive policies -cassa integrazione straordinaria (1968);
-extraordinary unemployment treatment
(1968);
-facilities for anticipated retirement (1968);
-Reform of the agricultural
“collocamento”(1970);
-domiciliary work law (1973);
-changes in the ordinary un. Indemnity
(1975);
-re-assessment of the salary integration(1975).

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Active policies -youth employment measures (1977);
-extra-industries mobility (1977);
-law on professional training (1978).

1980-1988
Passive policies -Anticipated retirements (1981);
-contracts of internal solidarity (1984);
-re-assessment of ordinary un. Indemnity
(1988).
Active policies -contracts of formation and training (1984);
-part-time contracts (1984);
-contracts of external solidarity (1984);
-nominal appointment facilities.

1988-1995
Passive policies -mobility indemnities (1991);
-change of the extraordinary salary integration
(1991);
-revision of the ordinary un. Indemnity
(1993);
- revision of the contracts of solidarity (1993).
Active policies -nominal appointment (1991);
-social useful jobs (1994);
-fiscal facilities for companies employing
unemployed (1994);
-incentives to contracts of formation and
training (1994).
Source: Gualmini, Elisabetta, La politica del lavoro, Bologna, Il Mulino,1998, p.163.

References:

Accornero, Aris, 1992, La parabola del sindacato, Bologna, Il Mulino.

Ferrera, Maurizio, 1993, Modelli di solidarietà, Bologna, Il Mulino.
Ferrera, Maurizio, 1998, Le trappole del welfare, Bologna, Il Mulino
Gualmini, Elisabetta, 1995, Le rendite del neo-corporativismo, Soveria Mannelli, Rubbettino.
Gualmini, Elisabetta, 1998, La politica del lavoro, Bologna, Il Mulino.
Istat, Rapporto sull’Italia. Edizione 2001, 2000, Bologna, Il Mulino.
Lunghini, Giorgio, Francesca Silva and Renata Targetti Lenti, eds., 2001, Politiche pubbliche
per il lavoro, Bologna, Il Mulino.

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