Sand Inwards The Gears

Today's Wall Street Journal has a beautifully informative editorial, "Employment, Italian Style." Snippets:

Once you lot hire employee 11, you lot must submit an annual self-assessment to the national government outlining every possible wellness as well as security risk to which your employees mightiness last subject. These include stress that is work-related or caused yesteryear age, sex as well as racial differences. You must likewise depository fiscal establishment complaint all precautionary as well as private measures to foreclose risks, procedures to demeanour them out, the names of employees inwards accuse of safety, every bit good every bit the physician whose presence is required for the assessment.


Once you lot hire your 16th employee, national unions tin give the axe gear upwardly shop. As your companionship grows, as well as hence does the number of required employee representatives, each of whom is entitled to 8 hours of paid move out monthly to fulfill wedlock or works-council duties. Management must consult these worker reps on everything from sex equality to the introduction of novel technology

Hire No. xvi likewise agency that your adjacent recruit must qualify every bit disabled. By the fourth dimension your theatre hires its 51st worker, 7% of the payroll must last handicapped inwards around way,...

Once you lot hire your 101st employee, you lot must submit a study every 2 years on the sex dynamics inside the company. This must include a tabulation of the men as well as women employed inwards each production unit, their functions as well as bird inside the company, details of compensation as well as benefits, as well as dates as well as reasons for recruitments, promotions as well as transfers, every bit good every bit the estimated revenue impact....

This form of matter is difficult to rails down. You can't easily honour a prepackaged "list of regulatory sand inwards the gears lowering productivity as well as work inwards Italy," the fashion nosotros tin give the axe honour (statutory) revenue enhancement rates, spending numbers, involvement rates, as well as and hence on.  So similar the drunkard inwards the sometime joke, looking for his auto keys nether the low-cal fifty-fifty though he knows he dropped them a block a way, much economical give-and-take focuses on those headline issues ("Stimulus!" "Austerity!" "Bailout!" "Leave the Euro!" "Raise/lower taxes!") as well as ignores all the sand inwards the gears.

The magazine writes, 

All of these protections as well as assurances, along alongside the bureaucracies that oversee them, subtract 47.6% from the average Italian wage, according to the OECD.

I wishing the WSJ had footnotes or links, fifty-fifty inwards its online edition, to move inwards easier to rails down  numbers of this sort. Influenza A virus subtype H5N1 quick tour through the OECD website provides around horrifying numbers on
 Labor revenue enhancement wedges of 40-50%, to which nosotros must add together “non-tax compulsory payments (NTCPs)” which "represent a rigid growth over as well as inwards a higher house the overall revenue enhancement burden. E.g., inwards 2011, the compulsory payment wedge for the average unmarried worker was 50.4% compared alongside the corresponding revenue enhancement wedge of 47.6%" And remember, i time they give you lot a euro, you lot withal pay around other 21% VAT earlier you lot tin give the axe swallow that plate of delicious pasta.  But the WSJ paragraph suggests 47.6% is the effective wedge of rule on top of explicit taxation. (If readers know where it came from, add together a comment.)

Also left out is the upshot of this form of hyper-regulation on corruption. You tin give the axe imagine when the inspector comes inwards to come across if all the paperwork is upwardly to appointment how the conversation evolves. (Ask Luigi Zingales)

Cleaning upwardly this mess is what nosotros hateful yesteryear "structural reform." How to accomplish it politically seems similar a nightmare to me.  Fighting each of x thou regulations i yesteryear i seems hopeless. Each i sounds good, each i taken lone seems minor, each i has an entrenched involvement backing it as well as an regular army of bureaucrats whose jobs depend on its enforcement. And the economic scheme dies the decease of a thou cuts. Can you lot actually abolish it all inwards i cruel swoop or grand bargain?

Certainly non if you lot don't try. 

The WSJ headline was

Prime Minister Mario Monti has issued a novel "growth decree" to revive Italy's moribund economy. Among other initiatives, the 185-page excogitation proposes discount loans for corporate R&D, revenue enhancement credits for businesses that hire employees alongside advanced degrees,.. 

Not to belabor the obvious, only this is incredibly depressing. More particular programs are non what Italia needs. I promise at that spot are meliorate ideas inwards the residue of the 185 pages.