Learning from past Mistakes? Recent Reforms in Italian Industrial Relations

Abstract

Italian industrial relations appear to have undergone a dramatic transformation in recent years. Since the early 1990s, a series of major reform efforts aimed at reducing industrial conflict in the service sector, rationalizing labor relations in the public sector, restructuring collective bargaining arrangements, and re-establishing tripartite "concertation" at the national level have been launched. Based on an historical reconstruction of recent industrial relations developments, this paper argues that because these new reforms are tied to a major organizational reform of the Italian labor confederations which revitalizes plant-level structures, democratizes internal decisionmaking, and enhances the unions' ability to represent diverse interests, these recent reforms stand a better chance to succeed than previous reform projects of the 1970s and 1980s which were often undermined by internal dissent and defections. The paper suggests that perhaps the Italian unions' efforts to redefine themselves both vis-a-vis their members and in the larger political economy could represent a model of reform for other labor movements faced with similar problems. Learning from Past Mistakes ? Recent Reforms in Italian Industrial Relations Italian industrial relations, traditionally described as highly conflictual (Shalev, 1983), poorly institutionalized (Cella, 1989), and, more recently, "paradoxical" (Ferner and Hyman, 1992), appear to have undergone a dramatic transformation in recent years. Since the early 1990s, a series of major reform efforts have been undertaken to render Italian labor relations more efficient and quiescent. These reforms include the 1990 law regulating the right to strike in essential public services, the 1992 "privatization" of public sector employment relations, the abolition of the scala mobile (wage indexation mechanism) in July 1992, and a radical reconfiguration of collective bargaining arrangements in July 1993. Taken together, these reform initiatives seek to reduce industrial conflict in the service sector, rationalize labor relations in the public sector, restructure collective bargaining arrangements at both the national and company levels, and re-establish tripartite, neo-corporatist "concertation" between the social partners at the national level. Initial evidence suggests that these reforms may be working. For example, the abolition of the scala mobile and the re-introduction of incomes policies permitted Italy's monetary authorities to engineer a massive devaluation of the Lira (which lost about 50 percent of its value vis-A-vis the DMark) while avoiding a renewed inflationary spiral. According to the OECD, Italian manufacturers have in recent years improved their cost competitiveness (defined as cost of labor per unit of industrial output) by 34 percent -a figure higher than that of all of Italy's international competitors. This improvement was due not only to currency devaluations but also to wage moderation and productivity increases. Other indicators of positive change can be detected in recent contract negotiations. For example, the 1994 renewal of the important metalworking industry contract represented an unheard-of event in Italian industrial relations. Not only did the agreement respect the guidelines established by the new national incomes policies -notwithstanding the considerable growth of profits in this sector -but also the contract was signed without any recourse to strikes. Similarly, various national contracts in the public sector -the source of much of Italy's labor conflict in recent years -also respected the limits established by the government.2

Cite this paper

@inproceedings{LockeLearningFP, title={Learning from past Mistakes? Recent Reforms in Italian Industrial Relations}, author={Richard M. Locke and Lucio Baccaro} }