The money in Italians' pockets, derived from their wages, continues to decline, while the cost of living continues to rise. This gap gives rise to profound social unrest that manifests itself in various ways (including through non-voting). There's not a single statistic that doesn't confirm a long-term trend: ever-decreasing salaries and wages. This is a fate we don't share with other Western countries; on the contrary, we're a negative exception even within the OECD.
According to a very recent report by the Parliamentary Budget Office (UPB), between 1990 and 2024, gross wages in OECD countries grew by 35 percent, while in Italy they decreased by 1,6 percent. From 2021 to early 2025, Italian real wages were still about 7,5% below the level at the beginning of 2021: it was the worst decline among the major OECD economies.
The study, authored by Stefano Boscolo, Corrado Pollastri, and Lorenzo Toffoli, depicts the steady impoverishment of Italian workers. According to INPS, the decline in real wages in the private sector between 1990 and 2026 was 6,6 percent, but at the lowest levels of corporate hierarchies, the decline exceeded 40 percent.
Over the past 30 years—an enormous period, spanning more than a generation by today's standards—Italian workers' wages and salaries have done nothing but decline. The decline compared to 2008, before the Great Financial and Social Crisis erupted, is striking, and the numbers leave no room for doubt: Italians' purchasing power has decreased by 8,7 percent. Over the same period, the French have seen their purchasing power increase by 5 percent, and the Germans by as much as 15 percent. According to this OECD ranking, which somehow calculates well-being based on spending power, Italians have fallen further behind than any other major economy in the world. Therefore, it's not true that the impoverishment of the population, excluding the niches of the rich and super-rich, is the same everywhere, but in Italy it is certainly at the highest levels compared to Western societies. The phenomenon also extends geographically. Impoverishment, linked to wages and salaries that have stagnated or even decreased for 30 years, is certainly felt most in the Central and Southern regions. But it's also felt in Milan, which has recently entered the world rankings of the cities with the highest number of millionaires. In the Lombardy capital, where salaries are among the highest in Italy, averaging €35 a year, every worker has lost something like €1.000 in their paycheck since 1990. Their wealth has decreased, rather than increased. Meanwhile, the cost of buying or renting a home has tripled, and spending has also increased well above the annual rate of inflation. The loss of purchasing power has been devastating for Italian workers. And it has combined with a steep decline in productivity that has penalized families first and foremost. In this case, the factors driving the decline are diverse and also involve the burden of bureaucracy or the reduction of productive investments, both public and private. And also a decisive factor lowering productivity in Italy: the low employment of women in the workplace. In Italy, only 49 out of 100 women of working age are employed, compared to 71 in Germany and 64 in France. We are wasting a human resource, and we all pay the price.
It's difficult to calculate the threshold for a good salary in such a diverse country, between North and South, in Italy. Now, the first levels of permanent salaries, after internships at 500 euros a month, hover around 1.200 euros a month . This figure is certainly hard to come by in the northern regions of Italy, but in the central and southern regions, especially if family support is also added, one can get by. This doesn't mean making a life plan. And in any case, the role of parallel welfare becomes essential, with the seven million grandparents who pass on money to their children and grandchildren. According to economists and sociologists, under current conditions, a good salary in Italy for a family with children means bringing home something like 4 euros a month. This can even be enough to pay off a mortgage and enjoy a decent vacation. A difficult figure to reach, even with a couple earning twice as much.
The causes of this record, which portrays a country in decline, are many and should be examined one by one. From increasingly weakened workers' rights (a situation that makes it difficult to secure wage and salary increases) to the eclipse of unions; from low productivity to the complete disappearance of the income policies that accompanied Italians' long march toward the threshold of prosperity. As usual, we manage to "get by," and so the Italian middle class has become a nation of roomers (everyone tries to rent out their properties, when they have them) and grocers (the most widespread and widespread economic activity in all regions). But how long will this (i)equilibrium hold?
No one has a magic wand to reverse this disastrous trend that is impoverishing the entire country, but some choices, at a political level and based on agreements between the social partners, can have a positive effect:
For example:
- Reduce the tax wedge. In Italy, the cost borne by the company is much higher than what the worker receives in his paycheck. In 2024, the tax wedge for a single worker with an average salary was 47,1% of labor cost, against an OECD average of 34,9%.
- Exempt wage increases from taxes for a certain number of years. This way, wage and salary increases, which are often negligible, would become net benefits for the employee. And the company would also have an incentive to introduce pay increases.
- Increase productivity. If a worker produces significantly more value per hour worked, it becomes more sustainable to pay them more. This requires: greater investment in technology and automation; digitalization of SMEs; professional training; universities and research more closely connected to businesses; better infrastructure; less bureaucracy; faster civil justice; and greater competition in protected sectors.
- More bargaining at the second level. Italy is a country of territories and localisms, and national bargaining, equal for all, is not enough. The second level needs to be strengthened: The one related to the territory and the individual company. Within this framework, tax-free wage increases and even corporate welfare bonuses (for example, cash for employees who have children) can be envisaged, which can have a positive impact on the cost of living. Incentives should be linked to improved productivity.
- The minimum wage, While controversial, it can certainly help raise wages, also preventing forms of modern slavery that harm new hires. In Italy, unlike many other OECD countries, the principle of a "fair wage" has been introduced, but this is a generic measure that is insufficient compared to the minimum wage.
Read also:
- The minimum wage in Europe is very widespread
- Municipalities in Italy where the minimum wage is required
- In Tuscany, a CAF office just for mothers
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