Italy workers face declining purchasing power amid inflation

Italian workers face declining purchasing power as wage growth fails to keep pace with inflation. Istat reports that in 2026, contractual remunerations are expected to rise by an average of 2.5%, while inflation is projected at 3%. This trend marks the end of a period where nominal wages were gaining ground against rising costs.

A Bank of Italy study highlights a long-term decline, noting that between 2000 and 2025, real wages in the private service sector fell by 5.9% due to delayed contract renewals. In the industrial sector, real wages grew by 4.3%, aided by faster renegotiations.

In response to economic instability, labor unions representing employees at companies including Ferrari, Stellantis, Iveco, and CNH Industrial have proposed a new collective agreement. The platform seeks a monthly base pay increase of 150 euros over two years, alongside improved benefits and protections against the impact of artificial intelligence.

Other social groups, including pensioners and caregivers, are also calling for legislative action. Pensioners in Basilicata are requesting inflation-linked adjustments in the upcoming budget, while healthcare officials have criticized proposed caregiver legislation for focusing too narrowly on poverty relief rather than providing comprehensive social services.