Egalitarianism and labour

Abstract

AbstractA powerful egalitarian drive—the opposite of meritocracy—has guided trade unions’ action. Nationwide collective contracts in each sector account for the bulk of the average wage and do not allow for differentiation in line with productivity developments in companies or territories. Specific company-level contracts are not used, except for a few medium- to large companies, usually accounting for a relatively small proportion of overall wages. In practice, they can only add to national contracts and never derogate from them. Whether national or local, collective agreements do not only fix a minimum wage, but they fix wages for all categories of workers, whether blue or white collared. Various laws introduced over the past two decades have provided fiscal incentives to firms and workers who agreed to set up company-level contracts to increase productivity instead of relying on national contracts. The results have been disappointing so far, and the proportion of productivity-related add-ons is relatively tiny. All this has critical implications. Companies have few margins with which to legally reward the more productive workers and almost no possibility of punishing unproductive workers. And there is no relation between wages and productivity across regions of Italy, which is one of the causes of high unemployment in the South because both productivity and the cost of living are lower in that area. In addition, trade unions have always tried to protect the worker on the job instead of in the market; skilling, reskilling, and active labour market policies have been neglected.