Italy, a country of poor people and no middle class. Portrait that does not consider tax evasion

In recent days, the latest ISTAT data have been released in which a disconcerting picture of Italy emerges: a tenth of people are in a condition of absolute poverty, young people are increasingly poorer and inequality is increasing more and more. These statements are all true, although they may seem like classic clichés, but they should be placed within the national context.

Let's start from the fact that it is absolutely true that wages, in recent years, have been eroded by inflation. In 2021 wages grew by 0.6% versus 1.9% in prices, in 2022 wages saw +3.2% versus +8.1% in prices and in 2023 wages rose of 3.2% against the 5.6% increase in prices. At the end of 2023, however, the slowdown in inflation began to bring the differential back in favor of wages and the Bank of Italy itself said that after three years of erosion, 2024 is the year of recovery. It should be added that the inflation forecast for Italy in 2024 is 1.6% and 1.9% in 2025. Another problem is that the purchasing power of the gross wages of employees in Italy has “decreased in last 10 years of 4.5%” while in the other major economies of the EU 27 it grew at rates between 1.1% in France and 5.7% in Germany. In this case we would have to knock on the unions and ask where they have been in the last 10 years. Certainly the fact that salaries have stagnated and that inflation has been the burden of the nineties has not helped the finances of Italians, but from here it is no longer possible to raise alarms about poverty. Also because when these data are considered, the information that is taken is that which is available in plain sight, such as, for example, the tax returns submitted. It's a shame that in Italy we have tax evasion (self-employed workers and employees) amounting to around 34 billion euros. This means that you earn more than you declare and that the image that the tax authorities and consequently Istat have of the Italian population is slightly distorted. Speaking in practical terms: how many cases, after years, have been discovered of people who received the citizen's income and then owned Porsches and Ferraris? The Financial Police has been unmasking these people since 2021. Therefore, if on the one hand it is true that these last few years of out-of-control inflation have inevitably impoverished Italians, on the other hand raising alarms by painting a catastrophic economic picture is incorrect.

However, there are two points on which we should focus instead: the first is that the younger a person is, the more likely he is to have difficulties at work, and the second is the erosion of the middle class, which has nothing to do with the alarmists of a few days ago.

On the first topic, we should reflect on the fact that Millennials, the current thirty-year-olds, find it increasingly difficult to navigate the world of work and have to settle for low salaries and unstable contracts. However, this is the result of decades of lack of active policies towards this generational class and it makes little sense to link them to a specific reference year.

Second theme, the middle class. All governments, without distinction, have drawn wealth from this class without ever thinking of giving tax breaks of any kind. The reality is that now the central band has significantly thinned out and despite this it must continue to shoulder the 50% tax rate. This is actually a real problem on which little research focuses, given that many have the distorted idea that having an income of 50,000 euros a year means being rich.

The current government's objective is to try to lighten the tax burden on this class, “if the resources can be found”. Now, since the blanket is short once again the middle class will be forgotten.