Revitalizing Employment in Southern Italy

From Covid to today, the greatest employment growth in Italy has occurred in the South. In 2024 alone, Istat recorded 142,000 new entries into the workforce, mostly with permanent contracts, 50,000 more than the central regions and 25,000 more than the North. Over the last 5 years, the South has seen a 4.2% increase (Inapp 2024 annual report), double that of other macro-areas during the same period, with Sicily leading among the regions, ahead of Lombardy.

In short, an important trend that confirms the renewed and constant economic dynamism of the South, once the Cinderella of the country, despite only slightly narrowing the gap from the national employment average (48% compared to 64%, which is still far from the EU average of 71%). Certainly, investing in the South today is increasingly an opportunity, as demonstrated by the boom of the single Zes and the forecasts of new hires formulated by the business system and updated monthly by the Excelsior Information System Bulletin, created by Unioncamere and the Ministry of Labor and Social Policies, thanks to the National Youth, Women, and Work Program co-financed by the European Union. For example, in the tourism sector alone, where seasonality undoubtedly plays a decisive role, it is in the South that the largest share of probable hires is concentrated in the April-May-June quarter (+14,000 in April and +38,000 in the quarter, with the Center calculating 4,000 in the month and 13,000 in the quarter).

INCENTIVES
This explains the strong anticipation that accompanied the green light for the incentive for facilitated hiring of unemployed young people in the country, which provides a preferential lane for under 35s and unemployed women in the South. The measure, provided for by the Cohesion reform launched by the Government last year, was funded by the European Commission with 1.1 billion euros (the approval arrived at the end of January), which shared the strategic objective of the Italian Government on the need to alleviate the pressure of youth unemployment, especially in the South, making the problem its own and expanding its centrality to the entire Union. A significant decision because, according to the Ministry of Labor’s assessments, it will be possible to create 180,000 new permanent jobs over the next two years, many of which are expected in the South given the more advantageous conditions offered to companies by the provision. Last week, ministers Calderone and Giorgetti signed the relevant and necessary implementing decrees with which, in fact, the expected bonuses become operational (pending imminent publication in the Official Gazette).

OBJECTIVES
In detail. There are two types indicated by the Cohesion decree that will allow the application of exemptions for hiring: the first concerns unemployed women and young people under 35 who have never been permanently employed residing in the South, who are hired between January 31 and December 31, 2025; the second concerns young people under 35 from other areas of the country who have never been permanently employed, called to work between September 1, 2024, and December 31, 2025. Employers who hire young people or women with a permanent contract will be exempt from paying mandatory social security contributions. In particular, the maximum amount of aid is 650 euros per month for young people and women from the South and 500 euros for young people residing in other areas. As mentioned, to benefit from the tax regime, the employment contract must be signed by December 31, 2025. Eligible employers will receive the aid for a period of 24 months after hiring. The bonuses are aimed at all private companies, provided they have not laid off in the previous six months and that the hiring results in a real increase in jobs. The calculation also takes into account part-time contracts, weighing them based on hours worked. The measure seems designed especially for NEETs, young people who are not studying and not looking for work, but more generally, as explained by the EU, aims to “promote stable employment for those workers who encounter significant difficulties in entering the labor market or remaining active in it long-term.” It should also be noted that guarantees have been provided to prevent abuse: for example, the dismissal of existing employees to replace them with new ones benefiting from the provided support, solely to reduce labor costs.