(Finance) – While in Italy the minimum wage debate is lit – with openings to the confrontation also expressed yesterday by the Minister of Labor Marina Calderone -, waiting for the issue to return to the center of the confrontation already in September, an assist to the oppositions comes from the OECD and the Financial Times. “Minimum wages have, on average across OECD countries, proved to be a useful policy tool to protect the most vulnerable workers from rising prices. Nominal minimum wage adjustments have helped to contain the impact of inflation on the purchasing power of low-wage workers” say the OECD economists Sandrine Cazes and Andrea Garnero, in a study published by Center for Economic Policy Research (CEPR). “Our analysis – they continue – shows that the risk of further fueling inflation by raising minimum wages is limited”.
According to OECD economists “legal minimum wages should – therefore – continue to adjust regularly”. L’analysis by Cazes and Garnero recalls how in the last two years, in the face of inflation not seen for decades, real wages have fallen for several quarters to arrive at the end of 2022 2.2% down compared to the last quarter of 2019 (in 24 out of 34 Countries for which there is data). Between December 2020 and May 2023, almost all OECD countries took steps to raise their minimum wages to keep pace with inflation: on average, nominal statutory minimum wages increased by 29% between December 2020 and May 2023, while prices increased by 24.6% in the same period.
The study recalls the differences between different countries, with six-monthly or annual adjustments, discretionary or automatic in the event of indexation and precisely the fear of a price-wage spiral. “Most empirical studies agree that part of minimum wage increases are passed on to consumers,” reads the report, citing a study that found that a 20% increase in the UK minimum wage would only lead to an increase in the inflation of 0.2%, i.e. “minimum”. The study highlights how “regular and sustained minimum wage increases in times of high inflation” help “safeguard the purchasing power of minimum wage earners and can help reduce inequality at work”. Automatic indexing “can also increase visibility and transparency for businesses”, or it can “reduce the margins of judgement” for governments or social partners. Even with the “potential pitfalls – reads the study –, in the context of high inflation, we believe it is important to ensure regular adjustments of the legal minimum wages since real earnings tend to be eroded while inflation remains high”.
A positive opinion on the minimum wage also comes from the Financial Times. “The minimum wage works because it reduces wage inequality without penalizing employment, even if productivity is not increased” reads an analysis published by the FT. When Germany introduced the minimum wage in 2015 – recalls the British newspaper – it has reduced wage inequality without hurting people’s employment prospects. The same happened in the UK: when the Conservative government raised the minimum wage for the over-25s in 2016, it didn’t boost productivity much, but it did reduce low wages and at the same time it raised employment levels. Other countries and regions have taken the same approach, from South Korea to several US states. And, even in the face of inflationary pressures – underlines the FT – the measure seems to have held.
Judgments immediately ridden by the oppositions that aim to scratch the wall raised by the Meloni government on the measure. “From the Financial Times to the OECD today comes a clear and unequivocal promotion of the minimum wage. Not because they joined the popular petition launched by the opposition, but because – he says Arturo Scotto, group leader of the Democratic Party in the Labor commission – are used to making objective judgments. Which explain that the minimum wage strengthens bargaining and does not trigger any inflationary spiral. Our right, on the other hand, builds imaginary ghosts without any scientific foundation or international references. Their sovereignty pushes Italy to become more and more the province of denied rights and low wages”. “Even the Financial Times – echoes the group leader of the M5S in the Labor commission in the Chamber, Valentina Barzotti – promotes the legal minimum wage without ifs and buts, defining it as a useful tool for reducing wage inequality without penalizing employment or triggering the inflation-wage spiral evoked by the Government in the Def to support the logic of wage moderation. While it is already a reality in 22 out of 27 EU countries, in Italy we have a majority and a government which, absurdly, persist in saying no to a measure that would benefit almost 4 million male and female workers. The collection of signatures in support of our proposal is traveling at full speed and has already reached 300 thousand signatures: FdI, Lega and Forza Italia will also be the majority in Parliament, but on this issue they certainly are not in the country”.