Italy and Germany are taking steps to reform their labor market, but criticism abounds

During a special meeting on May 1, Prime Minister Giorgia Meloni’s government approved the decree on reducing the number of people dependent on state benefits and making the labor market more flexible, writes the Financial Times, quoted by Ziarul Financiar.

The government will also spend €4 billion on a six-month income tax cut for low-income earners and cut taxes on fringe benefits for workers with children, reflecting growing concerns over low birth rate strategies . The decree was harshly criticized by the unions.

Starting next year, Italy will have two social protection programs. The first, more generous, estimated to cost approximately 5.6 billion euros, will be intended for those considered unable to work due to a disability or family responsibilities. The other will grant lower benefits to those deemed employable, and they will be required to participate in training programs to receive state support.

However, Francesco Seghezzi, president of the Adapt Foundation, which researches workers’ rights, warns that a lack of training programs and the difficulty of identifying employable people could leave many Italians without sufficient support.

Giuseppe Conte, former prime minister of the 5 Star Movement, which introduced the anti-poverty subsidy program, harshly criticized the changes. “A serious government does not meet on May 1 to condemn young people to a life of insecurity,” he said, according to Deutsche Welle.

Maurizio Landini, president of the main trade union in Italy, CGIL, categorized the approval of the May 1 measures as an “act of arrogance”.

For its part, Germany has announced that it will create one of the “most modern immigration systems” to solve the growing problem of labor shortages, which risks becoming a “real brake on economic growth”, announced the German minister of work, notes the Financial Times.

Hubertus Heil said the immigration reform is part of a broader campaign by Olaf Scholz’s government to attract global talent to Germany, halt demographic decline and address the labor crisis that is becoming the main concern of the biggest companies.

The new immigration law will allow citizens of other countries to go to Germany to work even without a German qualification. Germany will also allow foreigners to earn points based on professional training and experience.

Some business groups, however, say that the reform does not go far enough. “It’s too bureaucratic. The requirement regarding knowledge of the German language is, for example, still exaggerated”, said Thilo Brodtmann, from the VDMA group.

Heil said the government is determined to avoid the mistakes of the 1960s, when Germany saw a huge influx of temporary workers from various countries such as Turkey, but they were fully accepted by German society years later.