Monday, January 16, 2012

How to Find a Job or a House in Italy. Merit, Friends and the Free Market

“Liberalisation” is the buzzword today but it is not always clear exactly what it means.

One example: an American television journalist, Wolf Achtner, is doing something revolutionary – he is applying for the job of editor of the RAI’s flagship evening news programme, a post which is vacant at the moment. He is qualified and should be a plausible candidate so his application should not be news; what makes it extraordinary is that senior jobs in the public sector are rarely advertised on the open market and even more rarely given to qualified outsiders. Political loyalty is the first requisite for any of these jobs and if the chosen candidate happens to be good, then that is an unexpected bonus.

It’s not only high profile media jobs which are handed out for political loyalty rather than professional qualifications. A recent Eurostat survey found that more than three out of four young people (77%) look for work through friends and relations. Less than a third (31.9%) use the employment exchange, the lowest in the EU apart from Cyprus (in Germany the figure is 82.8%, EU27 56.1%). This means that it is certainly not just the public sector where loyalty often trumps merit and ability. There are more small and medium sized Italian companies than in most of the rest of Europe which is a partial explanation for the use of private connections but the downside is that merit is often irrelevant.

Of course Italy is not the only country where jobs come through connections and apparently open search procedures are a cover to legitimise an insider candidate but it is striking how even the form of a level playing field is not respected.

Public sector jobs, from ministries to universities to the magistrature, are normally awarded by competitive exams and procedures which often mask the stringpulling and clientelistic practices but either way, connections are essential.

Another ongoing story illustrates the importance of connections over more universal principles. The Minister for the Public Administration, the magistrate, Filippo Patroni Griffi is in the spotlight after having paid €177,000 in 2008 for a three bedroom flat close to the Coliseum, a property with a market value of around €800,000 today. He bought the flat from INPS, the national pension fund, when he was a sitting tenant and after having won a case against INPS to lower the price. No one suggests anything illegal, the resentment is in the knowledge that first of all one needs friends in order to become an INPS tenant (or in any other public institution) and friends in the magistrature are certainly a help in any legal action. When INPS and other public bodies sell property, the prices are far from the free market. The minister’s good fortune is paid for by the people who receive their pensions from INPS, as well as with a good measure of social resentment.

Then there are the measures which the government is preparing and and should be made public on Wednesday or Thursday and passed as a decree law on Friday. Whatever the law says in detail, it will affect a wide range of services and categories from taxi to lawyers to petrol stations and public services. Even if only half are implemented, it will mean a revolution in both the Italian economy and consumer habits, one which today’s opinion polls say that most Italians strongly favour. They think, not unreasonably, that they will save money. Who will pay is not very clear yet.

The number of taxi and pharmacy licences is likely to be increased; lawyers accountants and notaries are also likely to have to open their doors as well as giving clients estimates for the job to do. Fuel distribution is going to be eased allowing petrol stations to sell a wide variety of goods as in most other European countries and to buy their fuel from other distributors rather than be tied to a single brand. The railways too are likely to see other companies using the tracks, a reform which has already begun in a small way. Also on the public side there is a good chance that local transport service will be opened to competition along with some other services.

There are ongoing rumblings to make the labour market more flexible, possibly introducing the Danish model which makes hiring and firing relatively easy but also provides sufficient support for laid off workers.

It all sounds wonderful if you don’t belong to one of the “liberalised” fields, most of which have been threatening action. Taxi drivers are already on the warpath and have already had some dress rehearsals for what is more a lockout than a strike. Lawyers are very represented in parliament and have already said that they will boycott the ceremony of the opening of the new judicial year. There’s a transport strike planned for 27th and a seven day petrol station strike. The unions have repeatedly said they will not accept any reduction of job security.

There is a potential for serious social unrest; and yet the political parties all pay lip service to the need to liberalise, but they too are looking to their constituencies and saying “open up everything but don’t touch our supporters’ interests”.

This is the real test for Monti – his austerity budget was child’s play. Now he will have to navigate between very, very divergent interest groups with very different game plans to look after those interests, plus political parties which are increasingly disconnected from society.

His strongest weapon is the depth of the crisis which does allow procrastination. He could set the ball rolling by offering jobs in the public broadcaster to the most qualified and sell publically owned housing to the highest bidder on the open market.

1 comment:

David said...

An excellent article.
If Italy could create new jobs as well as it protects ones already held, it would be soon out of this economic crisis and I speak as someone who has lived in this country for many years.