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New salary increases from January 2023?  The three scenarios are on the table

New salary increases from January 2023? The three scenarios are on the table

The government intends to step in with the tax wedge, with the benefit going directly to the workers. The maneuver that reaches the councils or ministers must provide for the confirmation of the reduction in the tax wedge by 2% up to 35 thousand euros, while the exemption will rise to 3% for the lowest incomes, that is, those up to 20 thousand euros. If so, the real novelty is that an increase in workers’ wages can be expected but we are talking about reduced figures.

This measure will be funded, at least in part, with money saved from basic income pressures. Just renewing the cut wanted by the former executive would cost about 3.5 billion, but the resources for the new intervention must be added to the bill. The goal of the majority is to reach – within a while, but perhaps early next year – those five points promised by the Brothers of Italy in the election campaign, two-thirds of which are in favor of workers and one-third of companies.

Cutting the tax wedge: how it works

The minimal aim, however, is to extend the “help” to the workers Draghi has already provided on the field. The tax relief of 0.8 percent was actually introduced with the budget law of 2022 and then increased by another 1.2 percent with the decree of Aiuti bis.

At the time, the unions were exasperated by the small number of salary increases: just think that, according to Uil’s estimation, a 1% cut (therefore half of that which takes effect in 2022) would imply a monthly increase of €15 for gross income equal to €20. 27 thousand euros and about 35 thousand for income. A little, then, but it’s still better than nothing.

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Now the wedge can be further cut. It remains to be understood how the benefit will be distributed: the Draghi government has allocated it all to the workers, this time – at least according to some rumors in the newspapers – the executive could make a different choice and leave part also to the companies.

But in fact, the words of the Minister of Economy Giorgetti seem quite clear from this point of view: “The measure of the tax wedge is not currently funded for 2023,” said the head of the economy, stressing at the time that “the government will not only finance it and then renew it for the next year, It also increases it for workers with lower incomes.” In short, workers will once again benefit from cuts, especially those whose gross income is less than €35,000. Even Giorgia Meloni, while not talking explicitly about the wedge, made it clear that the CEO is working to help families and businesses, “with special attention to those on low incomes.”

The three scenarios for 2023

So what will change from 2023? There are three different scenarios. If the government decides to confirm the 2% cut only, the salaries will remain the same because the measure that Draghi launched has already been in effect for a few months and the workers have already been able to benefit from these (modest in fact) salary increases. Just as nothing will change, at least in terms of wages, if the executive authority decides to raise the cut to 3%, with a third of the share allocated to companies. Needless to say, the latter would be one designed with the aim of providing convenience to companies and possibly encouraging employers to hire, although the resources at risk are somewhat limited.

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Finally, there is the third scenario, which is the most likely scenario at this point: that of making the reduction to three points by assigning everything to the workers. In this case, it is legitimate to expect new wage increases, but we are talking about rather small numbers, certainly not enough to offset the influx of inflation. But for now, not much can be done.

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