This month Italian lawmakers issued, for the first time, a law which provides for a social security benefit. It will help people who are out of work and are seeking jobs.
Economic development needs the strenght of aggregate demand, which consists of public expeditures, such as investments, and consumer spending. The latter is strictly related to the change in demand for goods and services, which may be the main result of a rise in wages, benefits, etc.
Economic development needs the strenght of aggregate demand, which consists of public expeditures, such as investments, and consumer spending. The latter is strictly related to the change in demand for goods and services, which may be the main result of a rise in wages, benefits, etc.
The relationship between consumer spending and income has always been of interest in the history of economic thought. According to classical economists, the wealth of nations in 1700s was related to aristocracy consumers in luxury commodities, such as tea, coffee, silk, cotton, gold, sugar, and so on. On the contrary, Marxian economists asserted that liberal economy systems need inequality: the more consumers spending the more socio-economic inequality. The experience of 1900s socialist systems by countries around the world showed the social and economic effects of low consumer spending.
Nowadays Keynesian economists, who recognize the "dark side" of liberal economy, think that aggregate demand have to be increased through public spending in education, healthcare, infrastructure projects, and sewage systems. These policies are strictly related to the Welfare State, which may increase public debt.
As above mentioned, Italian lawmakers are trying to implement a policy based on unemployment benefits, considering that the rise of jobless rate generates spending decline and a need for liquidity.
Since the early 1970s, successful public programs of unemployment compensation and job seekers' allowances have been designed to offset income shocks in some Anglo-Saxon countries, such as the UK and the US. That's why those countries haven't seen huge consuption losses in the last thirty years, compared with South Europe countries. In Italy and Spain the Welfare State have failed to mitigate the consequences of important labor income shocks, like those arising from the rise of unemployed people.
Since the early 1970s, successful public programs of unemployment compensation and job seekers' allowances have been designed to offset income shocks in some Anglo-Saxon countries, such as the UK and the US. That's why those countries haven't seen huge consuption losses in the last thirty years, compared with South Europe countries. In Italy and Spain the Welfare State have failed to mitigate the consequences of important labor income shocks, like those arising from the rise of unemployed people.
In Italy, unemployment benefits and job seekers' allowances are guaranteed by the Article 38 of the Constitution. Although Italian Government is still defined as "populist" by the establishment of the EU, the new decree in the field of job seekers' allowance, which had been issued in Italy this month, may help young people to successfully move from education to employment.
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