The sliding scale system in Italy

Abstract

The application of the sliding-scale for regulating the remuneration of labour was introduced for the first time into Italy in 1945 to meet conditions arising from war-time and post-war time inflation, and has been gradually extended to the several branches of the national economy. In Part I, the present study presents a detailed picture of this process of extension and sets forth the complicated mechanism and the different ways by which the sliding-scale is applied to the wages of the several groups of workers. In Part II the author discusses the problem of the reciprocal reactions between price rises and the wage rises induced by the sliding-scale. The examination of Italy’s special experience during these years leads the author to conclude that the sliding-scale system (a) has not been a causative factor for the inflationary upsurges; and (b) has proved inadequate for fully safeguarding, by itself alone, the purchasing power of the working class.

JEL: E24, E31, J31, J38