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Market Ups and Downs in Pastaland

Consumption of that most staple of Italian staples, pasta, had been falling, until last year that is.  Yes, figures just in from 2008 have shown that Italians ate 3% more pasta than they did in 2007.

This may come as a slight surprise when you hear that pasta prices in Italy soared by an average of around 30% in 2008, especially when the price of wheat, the constituent part of that most Italian of Italian foods, crashed.  Why this odd paradox?

Here’s a little speculation, and some information on what happens when Italians lose their jobs.

Food Prices Up in 2008

Food prices overall went up in Italy in 2008, and credit crisis fears plus falling Italian production figures even had the Italian government pledging to help out less well off families.  The so called ‘social card’, which seems to be more of a gimmick than anything else, has been launched.  Very few families will actually benefit from the extra few Euros this government handout will entitle them to.

Still, the increase in the consumption of pasta could be seen as an indication that rising prices are starting dent Italian wallets.  What is not reported in the recent Panorama blog article in Italian on the subject of pasta is whether the consumption of other foods has fallen.  This may well be the case, and Italians may well be buying more pasta and less of other traditional Italian foods, such as good quality ham, salami, and cheese.

Pasta dishes, when all is said and done, are filling.  They can also be pretty cheap, as a ragu does not cost a fortune to rustle up.  This means it costs less to fill the stomachs of the average Italian family, especially when such families are tighten their belts.  This could be the reason why pasta sold like hot cakes (!) in 2008.

Pasta Consumption as an Economic Indicator?

Interestingly, the consumption of pasta does not seem to have been used as a form of economic indicator for the overall health of the Italian economy.  It would be appropriate, after all.

Did pasta consumption increase during other periods of economic crisis in Italy?  I don’t know, but it may be interesting to discover.  Perhaps someone can enlighten me.

Italians Paid Less for More, after Christmas

Despite increasing pasta consumption and press reports of more and more Italians being sent onto ‘cassa integrazione’ programs, spending just after Christmas appeared to be at similar levels to that in the period on the run up to the festive season.

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Italians were spending at Christmas, but not quite as extravagantly as in previous years.  After Christmas, and on account of low spending, the start of the winter sales was brought forward, as happened in the UK, and Italians went out and splashed out, probably picking up the things they would have normally bought before Christmas at discounted prices.  They also got rather more for their money, what with the 50% reductions being offered in many shops.

But what happens to those poor Italians caught in the middle of the economic downturn?  Those Italians who lose their jobs. for instance.  Enter ‘Cassa integrazione’.

What is ‘Cassa integrazione’?

‘Cassa integrazione’, in case you were wondering, is a way of laying off workers in Italy.  Companies worried that sales are not going to cover costs can opt to send certain employees home, but, and in view of the fact that long term unemployment benefit does not exist in Italy, these laid off workers are paid a portion of their salaries.  Such workers may also be offered training courses to keep them occupied while they are not working, or they may be offered jobs in other branches of the same company around Italy.  The ‘cassa integrazione’ system is funded by Italy’s state pensions body, INPS.  What are in effect temporarily suspended employees are paid around 80% of their former salaries, although there is a cap on the maximum level which these former employees are able to receive.

Cassa Integrazione Details – Standard and Special Circumstances Packages

Employees can stay on these special lay-off programs for a total of four three monthly periods over a period of two years.   At least this is the case with the standard or ‘Cassa integrazione guadagni ordinaria (CIGO)’ system.

There is also another cassa integrazione system for companies employing more than 15 people in the quarter preceding the emergence of economic difficulties.  This second system can also be brought into play when companies close down while premises are being refurbished or when the company is being reorganised/restructured.

Employees on these cassa integrazione guadagni straordinaria (CIGS) – special circumstances systems can continue to receive payments for up to two years.  From what I understand, as with the standard system, 80% of salary is paid to employees on these ‘special circumstances’ Italian lay-off programs.

How those Payments from the Italian Government Might End

The government funded payments which laid off employees receive may be terminated in three circumstances:

  • The individual concerned refuses to attend training or re-training courses, or
  • he or she refuses the offer of another position which is considered to be similar or better than that previously held, or
  • if an employee refuses to undertake work of a public service nature assigned by the Italian government.

So now you know what happens when Italians become sort of unemployed: they receive a form of unemployment benefit, and purchase more pasta.

What is not too clear is what happens when the cassa integrazione period ends.  Presumably former employees receive nothing, and can no longer afford to buy pasta either.

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