Italy Ponders Radical ‘Job Sharing’ Scheme To Improve Youth Unemployment
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The Italian government is reportedly considering a “generational handoff” scheme that will see older workers reduce their work hours in order to mentor younger employees at the same job, said the Wall Street Journal on Tuesday, in the latest idea to bring down youth unemployment in the country, which has hit 38.4 percent despite possessing the most educated generation in its history.
The Italian government is reportedly considering a “generational handoff” scheme that will see older workers reduce their work hours in order to mentor younger employees at the same job, said the Wall Street Journal on Tuesday, in the latest idea to bring down youth unemployment in the country, which has hit 38.4 percent despite possessing the most educated generation in its history.
The intergenerational “staffetta” – which is also the word for relay race in Italian – is among several proposals set to be brought forward by Labour Minister Enrico Giovannini this week, WSJ reported, while Giovannini is said to have already discussed the with union leaders, who so far have been strongly supportive.
The rough mechanics of the proposal would work out like this: employees near retirement age would work half of the regular time for half their pay, while the rest of their job would be done by a younger worker. In return, the government would guarantee full social-security contributions to the older workers, while employers can pay their younger staff less per hour than what the older worker was receiving.
Eventually, when the older worker finally retires, the government hopes that as many as 500,000 youths will be able to take up permanent jobs over the next five years.
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Critics say that if the plan is enacted, the government will not be creating any new jobs, but simply subsidising current jobs, to reduce youth employment in the short-term, at the cost of nearly 1 billion euros a year.
[quote]”Working less so that more can work is not going to get us anywhere,” told Fiorella Kostoris, an expert on public finances, to WSJ. “To make more people work we all have to work more.”[/quote]Admitting that the plan was “costly, but possible,” Giovannini however added, “we need to measure the cost of this against the cost of not doing anything.”
Among the other benefits Giovannini sees for the plan include reducing pessimism among Italian youth and avoiding wasted youth human capital by prolonged bouts of joblessness.
According to WSJ, the Italian governments plans to argue at next month’s EU summit on youth unemployment in Brussels that investments in human capital is favourable to reduced public spending, i.e. austerity, in improving Europe’s crisis.
[quote]In a speech to parliament, Prime Minister Enrico Letta urged Europe to spend as “as much energy on devising policy frameworks favouring economic growth and job creation as they have on enforcing credible public finances.”[/quote]Related: New Italian PM Suspends €6 Billion In Planned Tax Rises
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WSJ reported that several employers have already expressed interest in the handoff proposal. However, they foresee problems in finding older workers who will volunteer to take a pay cut to allow younger employees in.
“On the other hand, if they fear their jobs might be lost altogether, they could face worse: reduced pension checks or several years of waiting until they are eligible for full pensions,” WSJ said.
