Contractual Minimum Wages and Collective Bargaining. Italian Evidence From 40 Years of Data

ABSTRACT

This study documents the evolution of minimum wages bargained in Italian collective contracts over a 40‐year period (1983–2023). Real minimum wages have grown over the last three decades, particularly among high‐skilled occupations, but the 2022–2023 inflation crisis eroded this growth. Nominal minimum wage growth is strongly correlated with inflation, but not with sectoral productivity and unemployment, which is consistent with coordination across industries and real rigidity. Increasing differences between high‐ and low‐skilled occupation minimum wages explain around one‐third of the overall growth in the inequality of full‐time equivalent daily wages that has occurred in Italy during the 1990s.