Italy’s new productivity deal: a critique

Wednesday two of Italy’s three trade union confederations signed a ‘productivity’ deal that sees employers gaining greater ‘flexibility’ to alter contracts and working conditions, with negotiations over labour contracts dealt with at a local level and not through sector-wide collective labour agreements. The largest union confederation CGIL rejected the deal. In return for this the government will provide €2.1 billion  in ‘productivity’ tax incentives until 2014. Economic Development Minister Corrado Passera has claimed the deal would permit an increase in wages and jobs.

Here’s a take on the deal, published a day before it was signed, by Giorgio Cremaschi, a senior figure in the FIOM metalworkers union:

A brutal class scam

The pact on productivity is a concentration of reactionary ideologies and pre-meditated iniquity that is at the basis of the agenda [of prime minister Mario] Monti The basic thesis that inspires it is a brutal class scam.

Italian productivity peaked in the ’70s, when the power of workers in businesses and in the labour market was at its peak. Since then it has been in continual decline, until it collapsed completely when the constraints of the euro and European neo-liberalism strangled the economy.

In all these years wages have regressed, both with respect to profits and in comparison with other OECD countries. An Italian worker  works two months longer a year than his/her German equivalent, but the productivity in Germany tops the league.

So why in Italy is there an agreement that asks people to work more hours in exchange for a much lower salary? For the same reason Monti today boasts of the least generous pension system in Europe, the maximum flexibility among workers, the most brutal cuts to public education and the welfare state, and at the same time proclaims that this is just the beginning and expects that his successors will continue down the same road.

There is a logic to this madness. If Italy is subject to drastic constraints of the European stability pact, of banking and finance, currency, and conservative governments, if the business sector wants to increase profit margins despite the crisis, then it is clear that the only leverage, the only real flexibility is that which comes from the exploitation of labour.

The productivity pact extends throughout the country the system of [Fiat CEO] Marchionne: the few who still work must agree to do so at the global market price – forget [proper] contracts and rights.

All this has nothing to do with the defence of employment, but only profits. Indeed, mass unemployment is necessary to force workers to bend to super-exploitation. Unemployment needs to continue, and grow, otherwise the model will not work.

To this end, the government provides tax cuts only for flexible workers. While the majority of workers’ pay is lowered, a minority can maintain purchasing power if they work more in a company that is doing well, and only the minority will have less tax on payroll. This while funds cannot be found for redundancy or unemployment benefits.

This is not just a union agreement, it is a project of social selection. It is the real answer to Monti’s crisis and the class interests he represents. Interests that require an increasingly brutal social devaluation of the working class, since the exploitation of the last thirty years was insufficient.

This reactionary social model rests on a corporate caste system and organized bureaucratic interests. The whole business sector, including cooperatives and of course small businesses closely linked to the Democratic Party, has signed the text with enthusiasm. Among the trade unions, the signatories are all those who have already signed the same conditions at Fiat, in return for the right to survive under the protection of the owner.

The CGIL has not acceded to it, but is reeling in a sea of ​​contradictions and uncertainties.

The pact on productivity is the third such agreement in recent years that devastates the national contract and all the bargaining power of labour. The first, in January 2009, was not signed by the CGIL. The second of June 28 of 2011, in clear continuity with the previous one, was however, signed by the CGIL, and even the Fiom now demands its full implementation.

This latest pact on productivity clarifies, to the cost of employees, some ambiguous wording of the previous agreement, finally demolishing the national contract.

But signing yes once, and no another time, does not add up to an alternative, even more so when the main contracts signed this season already dispensed an orgy of flexibility…

If it does not want to follow a script already acted out many times, it is not enough not to sign the agreement. If you do not agree with the pact on productivity, we must fight, disobey its rules, clash with those who accept them.

Either you are, even if only passively, with Monti, its politics, its agreements, or you are against them and against their supporters, in the middle there is only impotence and hypocrisy.

Micromega, 20 November 2012