Evaluating the Jobs Act in light of the figures

I don’t know about you, but my eyes glaze over every time I have to look at figures. However, I decided to overcome my habitual resistance when Italy’s national statistics institute Istat released its provisional employment data for September. The reason: I was trying to get to grips with the new labour market reform otherwise known as the Jobs Act for a story on prime minister Matteo Renzi’s reform agenda and I wanted to know whether the measures were actually achieving the stated aim of bringing down high unemployment and creating more stable jobs. Well, in the immediate term it seems they are.

The figures show a 0.9 per cent rise in employment year on year despite a less than brilliant GDP growth rate, suggesting that the upturn cannot be attributed to economic recovery alone. Rather, it is also the combined result of the Jobs Act and exemptions on social security contributions for employers taking on new steady hires this year.

The number of people in work in September rose by 192,000 over the same month in 2014, Istat said. Over the same period the number of people on permanent employment contracts rose by 113,000 and on fixed-term contracts by 107,000. Simultaneously the number of self-employed fell by 28,000. Ergo: more jobs and more stable jobs. Exactly what the government set out to achieve.

Of course much will now depend on whether the incentives for employers become permanent (economy minister Pier Carlo Padoan has said they will not and already in next year’s budget currently before parliament they have already been reduced considerably with respect to this year) and, to an even greater extent, on how Italy latches onto recovery after the longest and deepest recession since World War II. To quote one informed observer, economist and statistician Gabriele Olini, labour market reform has gone as far as it can; now it is up to economic and industrial policy to do the rest.