Poverty is on the increase among Italians and so is inequality of wealth, according to the Bank of Italy. Figures from the country’s central bank show that in 2010 14.4% of Italians were poor – defined as having an income lower than half of the average – up one percentage compared to 2008. The proportion of poor among foreign citizens residing in Italy was significantly higher, at 40%. The richest 10% of families owned 45.9% of the wealth, compared to 44.3% in 2008, showing a widening gap between haves and have nots. Bankitalia
New figures from the Bank of Italy put paid to all the nonsense that Italy is broke. They show that Euros 9.5 trillion is tied up in household wealth. That’s a vast resource that if tapped would solve the country’s public finances overnight and provide plenty of resources for growth, jobs and high quality public services for all.
Equal to almost Euros 400,000 a family on average, the figures show Italy is considerably richer than other leading developed economies, including the UK, France and the US. Household wealth is also more than five times the country’s Euros 1.9 trillion debt, the size of which has been the excuse a mad austerity drive that is hitting the poorest hardest and sending the economy into a downward spiral.
So how to mobilise all that wealth, two thirds of which is tied up in property, for the good of all Italian citizens? To answer that question first we need to understand how that wealth is distributed. Fortunately the country’s central bank answered that question too.
The Bank of Italy calculated the so-called Gini coefficient, a measure of inequality, for Italian household wealth, finding it rose to 0.624 in 2010 from 0.613 in 2009. 0 expresses perfect equality where everyone has equal shares of income and a value of 1 expresses maximal inequality where only one person has all the income. So Italian society is not only very unequal, the wealth gap is becoming even wider.
Translating this into a share of the nation’s household wealth, this means the poorest half of the population owns only 10% of the Euros 9.5 trillion in assets. And the richest 50% of families own 90% of the wealth, and that figure does not express how a large proportion of that is held by a tiny group of super-rich families.
So going back to that question: how to utilise that mountain of wealth in the country for the good of all, the answer is simple. Stop squeezing the working and middle classes, whose spending, research shows, helps sustains the local economy. Instead, soak the m/billionaires’ club.
Of course, such a move would require a radical departure from the past.
Italy’s rich, like elsewhere, have benefited over decades from the state relying hard pressed salaried workers for taxes which are deducted at source. And as elsewhere, businesses and high net worth individuals, with their expensive accountants and political contacts, have proved adept at shirking the taxman.
But in Italy, more than anywhere else in the West, they have been actively aided and abetted by the public authorities, because of the low priority given to collection and a series of tax amnesties that encourage evasion, which robs the Treasury of at least Euros 120bn a year.
Sadly there’s no sign that the so-called new “technocratic” Government in Rome will depart from previous “political” administrations. Apart from a few token measures such as a tax on some luxury goods and fine words about a new campaign against tax dodgers, Italy’s new PM has refused to contemplate genuinely progressive fiscal reforms, demanded most vociferously by the unions.
Instead Mario Monti is busily making the majority, who already shoulder too much of the burden of financing the state, pay even more, by cuts to pensions, welfare, public services and, via tax rises, the living standards.
As a member of the secretive Bilderberg club of plutocrats, Mario Monti is simply batting for his people, the ruling class, and in that he is every bit as political as his predecessors. While he’s running the show, you can bet it will continue to be the misery for most, and unlimited luxury for the lucky few.
So if anybody asks, isn’t the country broke? The answer is no. Italy is rich. But until that wealth is spread, for most Italians it will never feel like it.
PORTUGAL- Most young people under 25 earn less than €500, new figures show.
More than half of Portuguese young people under 25 earn less than €500 a month, as do a quarter of those between 25 and 34 years old, mainly because of unstable jobs and poor qualifications, CGTP trade union said
According to the CGTP, 40 percent of young people have temporary work contracts and earned 25 percent less an hour than permanent employees.
Poor qualifications and temporary contracts plus the fact that many young people can only find work in sectors that pay low wages mean most earn less than €750 a month.
France’s largest trade union central has called a national demonstration on Saturday to protest against the lengthening jobless queues and in-work poverty amid an escalating national economic and social crisis.
The call, part of a step up in action by the country’s unions, came as figures today showed the number of people actively seeking work in France reached the highest level recorded since December 1999, or 2.81 million.
The data is not good news for President Nicolas Sarkozy, who is widely expected to seek a second mandate in next spring’s presidential election. He pledged to bring down unemployment to 9% before the end of the year,
Still higher unemployment forecast
According to the most recent forecasts from national statistics bureau Insee, unemployment will rise again to reach 9.2% by the end of the year. The OECD today forecast that it would rise further to 10.4% by the end of next year.
This latest piece of bad economic news came on the same day that the OECD called for more austerity in France, even as it admitted the country’s economy, after two rounds of spending cuts and tax-rises this year, was slowing to a stop.
More jobs will likely be lost if Sarkozy’s right wing UMP party succeeds in rolling back 35 hour week legislation introduced by Lionel Jospin ‘s Socialist government in February 2000. This legislation to cut working time created 350,000 jobs and improved work-life balance for French workers. Earlier this month Jean-François Copé, leader the ruling UMP party indicated they were looking at scrapping it.
People in work are feeling the pain too, with wage freezes in the public sector, pay restraint in the private sector and downward pressure on the earnings of the self-employed. On top of this, workers have been hit this year by austerity measures, including welfare cuts and rises in VAT.
L’Humanité newspaper calculates these measures will take Euros 325 (£269) a month out of the pockets of a single person on a low income (Euros 1,416) and Euros 513 a month from a couple with two children with a joint income of Euros 3,500.
This is part of a wider picture of deepening poverty with 8.2 million living below the poverty line of 954 euros monthly, according to Insee.
The rich are the only ones not feeling the pain – the top 10% wealthiest saw a 0.7% rise in standard of living in 2009, and since 2004 the richest 1% have seen their assets swell by 47%.
Alternative to austerity
In an interview with L’Humanite newspaper today CGT leader Bernard Thibault criticised the government for allowing policy to be dictated by the international rating agencies and said “debt reduction has become an easy alibi to justify [social] regressions.” In the interview with the communist daily paper, he called for a public “financial pole” to promote growth and a concerted drive against tax dodging companies and the wealthy.
The CGT, together with other unions, is planning a rolling programme of anti-austerity mobilisations, kicking off with a day of action in defence of public services on November 30.
France has become much more unequal in recent years, new official figures show.
The richest 1% have seen their assets swell by 47% between 2004 and 2010, according to national statistics agency, INSEE.
The top 1% have « net » assets of 1.9 million euros, the figures show.
The gap between the top 10% and the poorer 50% of households has also widened, by almost 10%.
The top 10% have at least 552,300 euros in « net » assets while the bottom 10% of households have less than 2,700 euros, which is less than 0.1% of the total.
Jean Luc Melenchon, leader of France’s Left Front, an alliance of the French Communist Party and other left-wingers, blamed the right-wing administration of French President Nicolas Sarkozy.
He said figures show that « the policies of the President have born fruit – a tiny minority have seen their wealth grow at the expense of the people.
« Thanks to tax giveaways the Right has shielded a handful of oligarchs from the crisis. »
Melenchon, a former member of the Socialist Party, says the refusal of Sarkozy’s party, the UMP, to tax the wealthy in its 2012 budget, shows it is a party of the « privileged »
The Left Front is calling for a « radical change in the distribution of wealth » including a cap on income at 20 times the average to stem the accumulation of wealth.
Sarkozy’s 5-year term of comes to an end next Spring.
Jean Luc Melenchon’s blog
New research has uncovered massive hidden unemployment in Italy and a new army of precarious workers that has ballooned since the onset of the economic crisis.
Official figures show unemployment at around 8%, or just over 2 million. But new research by the CGIL trade union confederation puts it at 13% or 3.5 million. The study also shows there are some 8 million Italians who are either unemployed, working part-time involuntarily, or laid off in temporary redundancy schemes (cassa integrazione) living on an average of 600-700 euros monthly.
The new figures include people who are not included in the “restrictive” official data, so all those who are of working age but not economically active, as opposed to those actively looking for work and availabile for work.
The study found that over 500,000 jobs had been destroyed since the onset of the economic crisis in 2007 when the economy contracted for 7 quarters and then returned to the anaemic growth rates since 2001, which averaged over the decade just 0.2% on average, way behind the EU average of 1,3%. The first jobs to go were temporary and then permanent contracts.
In the centre-north of the country, permanent positions represent an ever decreasing amount of new contracts signed – falling from 24% in 2008 to 19% in 2010.
Underemployment is on the increase with the number of people working in part-time positions who would have prefered a full-time job hitting 1.85 million in the first quarter of 2011. Fixed term contracts meanwhile account for 22% of all jobs, with people with a low level of education hit hardest, but also a growing number of people over 44 years of age.
Together with the loss of jobs, the figures show a dramatic deskilling of the Italian workforce since 2007. The biggest losses were in technical jobs, which fell by 347,000 in 2008-2010, while 141,000 scientists and other highly specialised workers losing their jobs. 140,000 ‘semi-qualified’ manufacturing workers and 125,000 skilled craftsmen also lost theiur jobs.
Younger people have been the biggest losers though. In two years 854,000 Italian between the ages 15 and 34 have joined the dole queues, with 235,000 job losses in the 15-24 age group.
The CGIL, which is campaigning for a reversal of ‘flexible’ labour reforms enacted since 1990s, a greater state role in building skills, hi-tech industries and above all policies for growth, says these figures reveal a “radical change” in the structure of the labour market.
The full study (In Italian)
Euronews on Italy’s precariat
Cuts to Italian pensions are among the demands of the European Central Bank and IMF to restore foreign ‘investor confidence’ in Italy.
But new research by Italy’s trade union confederation CGIL has found that:
Furthermore, pensioners pay a third of national tax revenues, or Euros 52 billion into the Italian Treasury. This will rise by a further Euros 2 billion by 2014.
“As if this wasn’t enough pensioners have no choice but to pay taxes, while tax evaders continue to defraud the country,” says Ivan Pedretti, national secretary of SPI CGIL.
This is “profoundly unfair” and demonstrates that the government is placing the “burden on the poor, leaving the rich and privileged in peace.”
“It is really time to protect pensions, and introduce a tax on the assets of the very rich while at the same time launching a genuine fight against tax evasion.”