Italy's Stagnant Economy: Can a Shift in Priorities Reverse Decades of Decline?

Italy's median income has remained flat for half a century, despite economic growth across Europe's advanced economies. According to data from Our World in Data and the OECD, Italy's median income after taxes stagnated between 1970 and 2024, while other countries like Norway, Switzerland, Austria, the Netherlands, and Germany experienced significant growth.

The OECD found that between 1990 and 2020, Italy was the only country in the European Union where real wages declined. Meanwhile, hourly productivity grew by six percent in Italy, whereas Germany's increased by a staggering twenty-five percentage points more.

Italy is on track to become the most indebted country in the eurozone by the end of 2026, with public debt approaching 139 percent of GDP. This has been attributed to the country's system, which prioritizes seniority over merit and entitlement over contribution. The author argues that this system has taught Italians that their productivity is a debt to be repaid rather than a value they create.

The article concludes by pointing out that Italy still possesses valuable resources such as engineering expertise, creativity, design, and manufacturing capabilities that are in high demand globally. However, the country needs the courage to reform its system, which has been delayed for too long, and reward those who produce rather than forcing them to apologize for their merit.