Govt vows to act as unemployment reaches new high
Italy shed almost one million jobs between 2008 and 201328 February, 19:49
National statistical agency Istat also reported that some 478,000 jobs were lost in Italy in 2013, the worst year since the global financial crisis of 2008-2009, with an average annual jobless rate of 12.2% last year.
The new year got off to an even more dismal start, with the January jobless rate up 0.2 percentage points over December, Istat said.
Between 2008 and 2013, a total of 984,000 jobs in Italy were lost to the economic crisis - something that is "shocking," Renzi posted on his Twitter account during a meeting of his cabinet.
"Unemployment is at 12.9%. Shocking numbers, the highest for 35 years," tweeted Renzi, who has previously described Italy's unemployment rates as "merciless and devastating".
"That's why the first measure will be the Jobs Act," which Renzi, who formed his executive only one week ago, proposed last month before the leader of the Democratic Party (PD) became premier.
Earlier this week, Renzi said he would have his labour reforms and job-boosting measures, based on the Jobs Act, ready before a bilateral summit with German Chancellor Angela Merkel next month.
Fast action is needed promote business investment, improve labour market efficiency while cutting relevant taxes, Labour Minister Giuliano Poletti said after Friday's cabinet meeting.
One of the main aims of Renzi's Jobs Act would be to simplify Italy's labour system, eliminating many parts of the current myriad of work contracts and lay-off benefits.
A key proposal of the package Renzi announced last month, before unseating his PD colleague Enrico Letta as premier and taking the helm of government, is to have a single employment contract with job protection measures growing with seniority.
At present, older workers with regular contracts tend to enjoy extremely high levels of job protection, while young people are often forced to accept temporary contracts or other forms of freelance employment that guarantee them few rights and little job security.
The current system has been blamed for making firms reluctant to hire, as it is so hard to dismiss workers once they are on the books, and contributing to the high levels of joblessness, especially among the young. Making the task for Renzi's government more difficult are grim economic forecasts.
Earlier this week, the European Commission forecast growth in the Italian economy will be weaker this year than previously forecast and the country's debt as a percentage of gross domestic product will rise in 2014. The EC revised down Italy's 2014 growth forecast to 0.60% but said 2015 looks brighter, as stronger consumer confidence and external demand boost the economy. It also warned that the jobless rate this year will likely be worse than expected, lowering its forecast to an average 12.6% unemployment for 2014 due to weak labour market conditions and still sluggish demand.
Youth unemployment is particularly vicious, with an average rate of 42.4% in January for people aged 15-24, the highest since 1977, Istat reported on Friday. Reflecting the hard times, Istat also reported that the number of people in Italy who have given up the search for work is still growing. The so-called "discouraged", who have surrendered to the idea that there is no hope of finding employment, reached an average of 1.79 million people in 2013, growing by 11.6% over the previous year.