The Collective Bargaining Reform: Perverse Redistribution or Income Production?

Abstract

In this paper we investigate the effects on the real gross wage of the collective bargaining agreements signed at the beginning of 2009 between the employers' confederations, trade unions (with the exception of CGIL, tha largest union) and the Government (as an employer). We use a dynamic model to simulate the effects of alternative assumptions on the values of the relevant variables and parameters and show the agreements don't include sufficient devices for protecting the real wage against the risk of an inflationary erosion.

We also argue that these results depend to some extent on the sic et simpliciter confirmation of the second part of 1993 July agreement concerning decentralised bargaining, with its disappointing results on the productivity and competitiveness of Italian firms. A "Social pact for productivity and growth" is therefore proposed, aiming to stimulate innovative "complementarities" between new technologies, organizational re-engineering and workers' new competences within workplaces.

Keywords: Collective Bargaining, Real Wage, Industrial Relations, Firm Restructuring, Productivity

JEL Classification: J50, J53, L23