New law promotes employment of young and disadvantaged

On 26 June 2013, the Italian government approved a decree to boost employment for young and disadvantaged people. The government is providing total funding of up to €1.5 billion for various employment initiatives, including subsidies for employers who hire young people, those aged over 50, the unemployed and people with disabilities. While trade unions have welcomed the measures, employers believe that although their initial impact will be positive, they will not create long-term employment.

New measures

The Italian government has introduced a law by decree (in Italian, 450KB PDF) that aims to address the issues set out in the European Commission Council Recommendation on Italy's 2013 national reform programme and delivering a Council opinion on Italy’s stability programme for 2012–2017 (COM (2013) 362 final, 67.0KB PDF).

The new law introduces reforms that include employment incentives, internship and apprenticeship schemes, and measures to promote employment in southern Italy.

Employment incentives

For the four-year period from 2013 to 2016, government funding of approximately €800 million is being provided to encourage employers to hire young workers aged between 18 and 29. The government’s objective is to stimulate the employment of 100,000 young people, particularly in southern and central-northern regions.

As an incentive, the government will subsidise one-third of a young worker’s gross pay for 18 months up to a monthly maximum of €650 per employee. The employer can move subsidised employees from a fixed-term contract to a permanent open-ended contract and still receive the subsidy for a reduced period of 12 months, as long as they also take on an additional young worker.

To be eligible, the young candidate employee must:

  • be unemployed for at least six months;
  • not have a high-school or professional diploma;
  • live alone but be responsible for one or more dependants.

There will also be incentives for entrepreneurs who hire unemployed workers and people with disabilities, and financial help for people over the age of 50 or who have been unemployed for more than 12 months.

Internships and apprenticeships

To help young people move from university into the labour market, a grant of €200 a month will be paid to those who complete apprenticeships in the public or private sector. The government has made funding of €15 million available for this scheme and aims to reach 10,000 students. All university students who have finished their exams qualify for the grant, provided that they have obtained good results and have a low income.

The government measures will also fund a programme of youth training initiatives for southern Italy, where the highest concentration of young unemployed people is found. Incentives include:

  • finance for apprenticeships for those aged between 18 and 29 who are not in employment, education or training (NEET);
  • finance for training courses in the public and private sector for third-level students with excellent results and who are struggling financially at universities that sign the Ministry of University Education and Research's protocol.

The Ministry for Employment has also set up a fund of €2 million per year for regional and provincial authorities that cannot pay for training courses and apprenticeships.

Unemployment in southern Italy

Unemployment across all age groups is a serious problem in southern Italy. In addition to the measures to stimulate training for young unemployed people in the region, the new law introduces a range of other measures including:

  • funding of around €80 million to promote entrepreneurship in the south, with a view to setting up 8,000–10,000 new entrepreneurs. These funds include subsidies, facilitated bank loans, technical assistance and training;
  • a further €80 million to sustain the cohesion programme set up for non-governmental organisations that involve young people in projects promoting social inclusion.

In order to reduce poverty and support families in the south who are in financial difficulty, a ‘promotion of social inclusion’ programme will be set up with €167 million of funding.

Social partners’ reactions

The social partners consider the measures a positive first step, but some feel that they are not enough to boost economic growth and employment levels.

Giorgio Squinzi, President of the Italian employers’ organisation Confindustria, says the measures will produce an initial positive result very quickly, but he does not believe they will create long-term employment.

The General Confederation of Italian Labour (Cgil), the Italian Confederation of Workers’ Unions (Cisl) and the Union of Italian Workers (UIL) have said they are satisfied with the measures to stimulate employment among young people, particularly those that encourage the employment of workers on open-ended contracts. However, they believe a more complex intervention with a strategy to encourage development is needed.

Sofia Sanz, Cesos

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