Five hundred euro more a month: would a forced redistribution of incomes get Italy moving again?

Italy needs an incomes policy that gives people back the ability to plan their lives. For many families, working is no longer enough to build a positive margin between what comes in and what must inevitably go out on housing, food, transport, healthcare and children’s expenses. Above all, a margin is needed to cope with unforeseen costs, especially extraordinary ones. When that margin disappears and everything earned is spent, people enter a situation in which it becomes impossible to deal with the unexpected, even when it is minor, and at the same time serenity, the freedom to spend and the ability to make plans of any kind all diminish. The wage question thus becomes a wealth and productivity issue: it concerns families’ future, but also the prospects of the businesses that must sell goods and services to those families. After a long period of weak real pay, it is legitimate to ask whether the small adjustments repeatedly proposed by governments are enough, or whether an extraordinary intervention is needed, one capable of changing expectations quickly.

The starting point can be measured. According to the OECD, in the first quarter of 2026 Italian real wages were still 6.1% below the same period in 2021; the largest gap among the organisation’s major economies. In the scenario published in July, conditional on the duration of global economic disruptions linked to the conflict in the Middle East, the OECD forecast a further fall of 0.9% in 2026. In September, Italian inflation reached 4.2%, with an energy price increase of 22.6% (definitive Istat data). It is therefore not enough to see the number on the payslip rise: we must check how much daily life that number still allows people to buy.

Household savings and security are shrinking

Data released by Istat on 5 October show that in the second quarter of 2026 the propensity to save of consumer households fell to 6.7%, losing 1.2 points from the previous quarter. Over the same period, disposable income increased by 0.4%, while consumption rose by 1.7% and purchasing power fell by 0.9%. This is a quarterly figure, not the balance for the whole year, but it describes a clear strain: to sustain spending, families reduced the share of income set aside.

A further deterioration in 2027 would represent a very serious risk, especially if prices and incomes continue to diverge. From this comes the need to analyse truly decisive and incisive income redistribution measures, taking the place of those of doubtful usefulness because they lack their essential element: continuity. Among these, there is certainly the need to rebuild disposable income quickly so that people can consume without having to systematically forgo their financial protection. Part of the increase could finance purchases postponed for years, another part could rebuild an emergency fund or reduce debt. These uses also have value: a family less exposed to an unexpected healthcare bill or urgent repair is a more financially stable family. For this reason, an incomes policy should be judged not only by sales recorded in the months immediately afterwards, but also by improvements in family resilience.

A rapid increase, with an obligation and a counterpart

The scenario we are considering here is an increase of 500 euro net a month for a defined group of low- and lower-middle-income workers: 6,000 euro a year, obtained by combining a tax benefit of 300 euro net with a wage increase capable of producing a further 200 euro net. The public component should be a refundable tax credit, granted even to those who do not pay enough Irpef to benefit from a normal deduction. The corporate component should become ordinary pay, additional and not absorbable through the cancellation of other items. The aim would be a stable amount available, with a gradual reduction in the tax benefit as incomes rise, avoiding thresholds that penalise subsequent increases.

To implement an initiative of this scale, and above all to avoid it being lost in endless disputes between sectoral trade unions and whichever government happens to be in office, a national law would be needed to set a wage floor and a compulsory mechanism for adjusting the pay concerned, without making the measure dependent on each company’s consent. A minimum hourly rate, on its own, would not increase the pay of those already above the threshold: to reach lower-middle incomes as well, an additional provision would be needed. The rules should be drafted in compliance with Articles 36 and 39 of the Constitution, coordinating them with collective agreements and defining gross amounts, hours and monthly instalments. Guaranteeing a net result also requires taking account of taxes, contributions and possible cuts in other benefits: simply writing “200 euro” into the law does not by itself solve this conversion.

Businesses would be entitled to a certain, partial tax offset linked to the verified incremental cost. Not a blanket benefit on existing wages: the state would contribute to the additional increase, leaving a real share to be borne by the company. The support should also be usable promptly by businesses with no taxable profits, for which a simple deduction would have little immediate use. Checks would be needed to prevent fictitious reductions in hours, evasive replacement of staff and the transformation of increases already due into subsidised spending.

Businesses too must contribute

Asking businesses to contribute is a choice about income distribution, not a penalty on economic activity. In previous years, part of the productive system benefited from a significant expansion in margins: the Bank of Italy documents a three-year period of substantial growth in gross operating surplus, followed by a downsizing from mid-2024 and a rebound at the end of 2025. However, it is not correct to attribute exceptional profits to all companies obtained without producing more. The ability to absorb wage increases is uneven: those with margins and liquidity can contribute more; those operating in fragile conditions need verifiable support.

The corporate contribution would have an economic counterpart, as well as a tax one: a broader pool of consumers with spending power. The individual company, however, cannot be guaranteed to recover every euro paid to its employees, because additional consumption is spread across sectors and territories: part of it reaches foreign suppliers, and some exporting companies benefit only marginally from stronger Italian demand. The return must therefore be assessed at the level of the economic system, avoiding promises of automatic commercial reimbursement to every employer. Better wages may also encourage loyalty, but these effects are not the same for every business.

Thirty-five billion in additional consumption: the scenario to be measured

For ten million workers, an extra 6,000 euro a year means 60 billion in additional net income. If each beneficiary were to allocate 3,500 euro to consumption, demand would rise by 35 billion a year; 25 billion would remain for savings, debt repayment or other uses. The share consumed would be about 58%. This is a working hypothesis, not a guaranteed minimum threshold. A Bank of Italy study on the 80 euro bonus estimated a consumed share of 50–60% in the same year, with statistical limits on precision: a useful reference, but one that does not allow the result to be automatically transferred to a much larger and different measure.

Thirty-five billion would be a significant boost to sales. However, that does not amount to 35 billion in additional GDP, nor does it already represent the multiplier: the latter measures how much output rises in relation to the initial impulse. Imports, supply response, prices, savings and financial conditions all determine the outcome. Where productive capacity is available, more orders can support production, employment and investment; where supply is rigid, part of the benefit risks being absorbed by price rises. For this reason, incomes policy should be accompanied by measures on energy, housing, infrastructure and productive capacity, protecting real gains and correcting the tax drag.

The public cost must be stated, the return must be checked

The first credit of 300 euro a month, across ten million workers and twelve months, would cost 36 billion a year. To this would be added the compensation to businesses. Assuming, solely to illustrate the mechanism, that producing a further 200 euro net requires a total monthly company cost of 400 euro and that the state compensates 150 of this, the public cost would rise to 54 billion a year. Businesses would be left with 30 billion in incremental cost after support. The conversion between cost and net pay would need to be checked against actual payslips; the public cost indicated is before additional revenues and other budget effects. Fully reimbursing businesses would instead transfer essentially both components of the benefit to the state. However, VAT, income taxes and contributions generated by the additional activity would reduce the net cost, so a reduction in businesses’ contribution to the higher disposable income would be plausible.

Why would businesses accept it?

Not all would accept it willingly. If the increase is mandatory, consent is not the condition for applying it; economic sustainability remains decisive for the outcome. 3,000 euro a year per employee may be absorbable for one business and destabilising for another. The operating margin, payroll weight, liquidity and the ability to increase sales or productivity all matter.

Above all, the benefit of consumption is collective, while the wage cost reaches the individual company immediately. An exporting business may receive very little additional Italian demand; a supermarket may receive a great deal: we could not promise both the same return.

The public compensation, therefore, is precisely there to soften this difference. It could provide an ordinary share and greater transitional support for economically sustainable but particularly exposed businesses, subject to checks.

An ambitious incomes policy must protect purchasing power and employment together

Rising pay should be accompanied by public compensation conditional on safeguarding jobs, checks against evasive cuts in staff and hours, and tools for dealing with genuine crises. On the price front, stronger demand requires more productive capacity, more competition and action on essential costs: without these conditions, part of the benefit could be absorbed by inflation. The European comparison must also be tackled by stating the cost of the operation and how it will be covered, without assuming that it can fully pay for itself.

In conclusion, Italy must be able to debate an ambitious wage policy without reducing it to a succession of bonuses. The aim is to give people enough disposable income to live with greater peace of mind, consume and rebuild savings; to offer businesses a stronger source of demand, while asking them to take an effective part in the change.

A rapid increase of 500 euro net for the incomes concerned requires a substantial commitment, careful legislation and independent checks on the results. But the persistence of weak wages also has a cost: postponed purchases, financial fragility and investments that never start. The political decision is to determine how many resources to mobilise to break this stagnation, how to distribute the cost and what results to demand.

The expected economic return is significant, but it must be measured: higher wages, greater family security and stronger demand must become verifiable results, not promises used to postpone the assessment of risks.