Wage indexing and inflation in Italy
Keywords:Inflation, Italy, wage indexing
The automatic adjustment of earnings to the cost of living usually had two objectives, to protect wages in whole or in part from the effects of inflation and to avoid a spate of destabilising wage claims. Recently, however, in Italy a third aim has been added, that of reducing the differences in remuneration. The present article looks at the experience and prospects of wage indexing in Italy, limiting the analysis to the sliding-scale in industry. The author first considers how wage indexing works in Italian industry. The average effectiveness of wage indexing is then examined. Finally, the specific effectiveness of the method of indexing related to the unified value of the point is analysed.
JEL: E31, E24, J31