The problem of social security in Italy is like a karst phenomenon, that is, it is faced and resurfaces only in particular periods of time such as political elections or the Budget Law and then it is completely forgotten and disappears for many months. In this continuous up and down we are now in the calm phase and certainly this topic which interests all citizens will be under the spotlight again in the autumn on the eve of the Budget law also because some of the institutions that characterize early retirement such as Quota 103, Opzione Donna and Ape Sociale expire on 12/31/2024.
This is certainly not the best way to address and resolve a problem which, if immediate action is not taken, will become the “mother” of Italians’ problems and which risks becoming, as stated by Meloni, “a social bomb”. First of all, let’s start by stating that at the moment, despite all the gifts that have existed in the past such as baby pensions, the remuneration system, various social security concessions to many categories of workers, contribution discounts etc. etc. our social security system invented almost eighty years ago is still sustainable.
It was so because this system called pay-as-you-go (whoever pays social security contributions pays for those who are already retired) has held up for all these years because there were proportionately many workers who paid contributions and few pensioners. The pay-as-you-go system in order to be in balance it needs almost two workers for every pensioner and this ratio has been maintained constantly for many years. Then over the decades the number of pensioners has steadily increased and we already find ourselves with a ratio of 1.43 to 1. The projections of social security analysts tell us that in about twenty years this ratio will have dropped dangerously to 1 to 1 ( one worker for every pensioner) and the stability of the system will at that point be dangerously at risk.
The main reasons that have led to this situation are: constant decrease in new births (in 2023 they were a third of those born in 1964) and the increase in life expectancy. Since the system, in order to be in balance, is calibrated on a duration of the payment of the social security check of approximately twenty/twenty-five years, it is quite clear that this increase in life, which is obviously a very positive aspect, with the passing of the years puts the from an accounting point of view, the system is in difficulty. Furthermore, since we incomprehensibly persist in not wanting to separate social security from assistance, the introduction of the “welfare state” in the 1970s and its progressive implementation have burdened social security with costs that should instead be charged to general taxation. This is also determining, due to the inflation which has regained consistency in the last three years, a cost for social security which is over 15% of the GDP and also thanks to the upcoming retirement of the boomers of the 60s, this index will increase up to 17 % in 2040 and then begin a slow decline.
Because it cannot be increased infinitely the age to access the pension and the continuous deaths at work of those over sixty demonstrate that we need to start thinking about a different system than the current one which for the reasons explained above will no longer be sufficient to guarantee everyone a fair pension. Since the world of work has completely changed in eighty years, also thanks to AI, we must, perhaps, take into consideration a mixed system distribution/capitalisation because it is unthinkable in 2024 not to invest the enormous mass of money from the contribution payments, especially if we want to avoid our young people being forced to remain in the world of work beyond the age of seventy and then receiving a pension that will be 50% of their salary .
