buongiorno good morning i am the coordinator of this morning's activities so first of all i would like to greet all our audience in this wonderful room i would like to greet the people who are remotely controlled with us the two speakers who will be with us to debate the topic of public employment the english term public employment from my viewpoint as a labor legal expert in italian should have been perhaps a little bit different but we know that public employment is related to one of the key words of our festival so let's leave it as it is so before giving the floor to our speakers i would like to spend a few words to focus on this event which will have a maximum duration of one hour which will feature two presentations in a debate one presentation will be in english by pedro thomas and one presentation will be in italian by pedro garibaldi the topic is public employment a crucial topic which is fundamental both today and from a historical perspective and even more so if we cast a glance to the future this is a very complex theme which cannot be simplified even though we know that in our age we tend to simplify why is this a crucial topic well for several reasons the number one reason is related to the period we're going through trying to leave the pandemic behind this theme will be crucial in the next 10 15 years it will be crucial in the future therefore we have to think today about the future of public employment i have heard some optimistic words by minister brunetta yesterday and other guests of the festival well i believe that we need confidence in the public system in public employment in renewed engines but we must be very careful because we do not want this dynamic to become me a mere reaction to the emergency uh a noble ages which has been built in relation to uh negotiating thrust by the european union so we need to keep our perspective well compared to the past as i told you before this is a crucial theme and it is perfectly connected to the three words in the subtitle of our festival companies community institutions well i do not want to quote too many people but let me quote hopewell 1840 democracy in the u.s if an american citizen has resources buys an estate an estate which is full of trees and becomes a pioneer well what about the europeans a european citizen with resources immediately thinks about public employment well this quotation is very illuminating and unveils how crucial public employment is for democracy so a very complex topic in our two speakers today will illustrate part of this complexity describing their prospects which are the ones of the labor economy a complexity which is related to rules to the macro value and the micro value of this topic a complexity which is related to several aspects pertaining to the role of political protagonists to managers that are an important part of public employment and the trade unions that at least in italy play a role in this field which is sometimes a vindicating role rather than a proposing role so there are many many points we can touch upon i don't want to steal any time away from our speakers who certainly have more interesting things to say than i do so i would like to proceed with pietro pedro gomez who will speak first who is remotely connected with us hi pedro pedro comes from the pervert university in london and he has written a book for an english publisher friday is the new saturday well peter you have the floor good morning everyone thank you uh thanks so much for the the invitation and it's a pleasure to be here and i'll be talking about public employment and as you mentioned public employment is very important for our economies and for society for various reasons so first it's important from a labor market perspective and in oecd countries on average 18 of total employment is in the public sector it's also important in the budget so the majority of what economists call government consumption expenditures the contribution of government to gdp the majority is with a public sector wage bill now public sector workers are also the face of the public sector so they are the frontline workers that provide education law and order and health to some extent it's also important in the political arena a key issue in electoral campaigns and both in the previous euro area crisis the debate on austerity was largely linked to the role of public employment in wages and as you mentioned today and the kovid pandemic has again put focus on on the one hand the importance of having a modern public sector with a qualified workforce that can deal with this unpredictable crisis but the aftermath with high levels of debt also put emphasis on the costs of this this workforce now when we come to the public debate on public employment it's vibrant but it's often based on perceptions rather than farts and um often is is reduced to a sterile confrontation so some supporters of austerity that say oh it's a bunch of lazy bureaucrats to be cuts usually have a very kafkan view of the uh of the government and on the other side of the barricade supporters of public spending that say public sector need generous wages to deliver high quality service usually with a more bavarian positive view of of the government now my we approach this from an academic perspective and when we go to the economics research the economics literature it was there was a very large interest in the 1970s and 80s and this accompanied the rise of public employment that happened since the second world war and peaked in the in the 1980s the increase in the weight of the government and increasing the weight of public public employment but it diminished in the following decades and just to give you an example in between 2000 and 2010 in the nbr which is a club of academic economists american economists only 2 out of 10 000 papers mentioned public employment in their title or abstract now since the aurora crisis there's been a new wave of research focusing on the labor market effects of public sector employment and wages so myself i've been working on this for 15 years and what i find fascinating is exactly what you mentioned the complexity of public employment and the complexity and arises because it lies in the intersection of different economic fields from macroeconomics of labor markets macroeconomics of fiscal policy political economy public economics to more micro level fields like applied labor economics personal economics of the government or public administration so these illustrate the two angles in which you can approach the or study public employment a more macro perspective a top-down perspective or a more micro human resource perspective bottom bottom up our own research pietro and i we approached it from a macroeconomic angle so a top down so we think that sound macroeconomic policies on public employment and wages can create the right set of conditions to sustain effective microeconomic human resource practice but we think that even the best hr department uh would struggle if the right macro environment if the map environment is not uh is not right so when we go uh we the title is public employment but uh it should be really public employment and wages so when we go to uh public sector labor market there's always two dimensions and this is the first point i want to come across there is these two dimensions employment and wages quantities or prices so that the head counts and the compensation so let me explain you we got you through this graph on the x-axis we have government employment as a fraction of private sector employment in relation to private sector uh so the head count the number of workers and on the y-axis we have government wage bill how much the government spends with this workers relative to the private sector wage bill and this is hdot is one oecd country for 2008 and there's three facts i want to highlight the first one is that countries have very different levels of public uh of government or public uh in this particular data is government employment which is a slightly more restrictive version of public sector employment but their countries have uh various levels of public employment uh some uh about 10 of the workforce and some countries namely nordic and scandinavian countries that have uh more than 30 of public employment so it varies a lot across countries the second point is that naturally the more workers you hire the higher is the wage bill the the how much you have to pay in relation uh to the private sector and this is highlighted by this black line that tells us that on average when you hire more workers you have to pay more the wage bill is larger but what's striking about this uh figure is that there were six countries in 2008 greece cyprus italy ireland portugal and spain that it's not that they had particularly high levels of government of government employment when compared to other countries but the wage bill relative to the number of workers that they hired was very very very high so there is the issue of uh wages and compensation more than employment and these six countries were the ones that just one year after were in the center of the urea crisis for their poor public finance and the sclerotic labor markets so this is the first point these two dimensions employment and wages so let us think what what economists can tell about each one of them so can economies tell us what is the right number of public sector workers and the answer is no we cannot because at the source at the origin of the decision of how many workers to hire lies a more fundamental decision about the scope of the public sector what goods and services do we want the public sector to provide do we want them to provide primary secondary tertiary education health care elderly care child care and this is uh to it's a choice of society so it's a society's choice made through politics through political process and different countries would give different answers norway would give a different answer than the us now economists can help a little bit there is a further second uh decision is whether uh besides the the type of services the government wants to provide whether the government wants to provide them directly or they want to outsource to the private sector okay now economists so this is really a fundamental behind hiring workers it's to produce services so a lot of questions should be uh that's the the original question now economists do provide um or find other situations in which governments can use public employment so kane's famous metaphor of hiring public sector workers to overcome demand externality so we when we're in the recession must grave another influential economist didn't didn't think that was the best use of public employment but he thought it could be used as a targeted policy to overcome structural problems so if there are regions for instance that have been affected by globalization and competition from imports and then the government can use public employment to minimize the these side effects uh alberto alessina a influential italian economist uh mentioned about redistribution and obviously they are budgetary considerations now uh economists also point out that in practice there are also other less benevolent reasons or you that for the use of public employment so it's been documented that it's been used to promote the interests of politicians or civil servants for rent seeking so to satisfy unions or political groups or to win to win elections but remember that the source of the decision is really what services goods and services do we want the governments to provide now when it comes to public wages it's a different issue it's not a matter of preferences of society so if we think about the public sector as another sector in the economy uh different uh if it was the private sector that the wage in the private sector is an allocative mechanism so what does this mean uh it adjusts adjusts to market forces so you have adam smith invisible hands adjusting the wages to forces of demand and supply so if you think about you have this perspective about public sector wages they should be aligned with the wages in the rest of the economy with the private sector wages they shouldn't be the same if there are other characteristics of the job um that make it more pleasant or less pleasant but in general they should be aligned with the wages in the rest of the economy so in the private sector now in practice adam smith's invisible hand loses its touch in the public sector and in in practice the public sector wages are not an allocative mechanism and they don't respond respond as much to market forces they are more used as a policy variable so it's been documented that uh the the public sector wages responds to the tightness of the budget it's affected by unions and the powers of civil servants it's used to redistribute resources and to win elections so i want to give you an example in 2009 in portugal there was a year of crisis but three elections so public sector workers got an increase of uh three percent in nominal terms the following year because of budgetary problems they were wage cuts 10 for the highest earners and zero at the bottom so from one year to the other some public sector workers got an increase of three percent some public sector workers got a decrease of seven percent without any change in the workforce composition in their job description or in the product in their productivity now even when the government doesn't uh have an active wage policy just by inertia so if it doesn't respond fast enough to developments in the private sector it can generate this misalignment between public wages and private sector wages and this misalignment it's estimated by economists what we call public sector wage premium so this is not just a comparison of the average wage in the two sectors this is controlling for observable characteristics so think about two metaphorical brothers in the same occupation with the same education same age working in two different sectors and and this is from a paper by luis christopheides and maria michaels for european countries and they find this that the the wages are in general not aligned so there are some countries who the public sector pays less than the private for equivalent workers but the majority the public sector wage premium is positive here italy would come in the middle of the table in 2008 with a premium of about eight uh percent more now we should be very careful when we uh look at this uh at uh at a figure like this for two reasons first is when we estimate the public sector wage premium we have to go to micro data that usually comes three years uh later than there is the publication legs so this refers to the year 2008 and the picture today i'm sure it's very different from the the year 2008 and things uh in the public sector which premium can change dramatically and they can change very quickly so we should be very careful uh when inferring about what we think the conditions are now from uh these papers that estimate the public sector which premier the second point is that on average nothing is an average so public sector employment is very heterogeneous along uh various dimensions in particular education region age and gender so we should be very very careful when we interpret this averages of pay because it means very different uh things for different people so let me just illustrate with the heterogeneity by education you have here it's for the u.s but pretty much in every country is the same the the u.s government hires very few workers with lower qualifications and it hires one-third of all workers with a phd or a master degree but when we go to pay actually it's workers with lower qualification that have a higher wage premium and and it's workers with the the more qualifications that have the very low and very often uh negative a negative premium of working in the public sector so this misalignment of wages also occurs within the public sector for different types of workers um now let me give you uh let me give you an example of uh for for italy and this is data from the structure of earnings survey for 2014 this is going we are going to verify occupation categories and and see the average wage so domestic hotel and office cleaners and helpers in the private sector they earn a thousand four hundred sixty euros in the public sector they earn on average uh uh ten percent nine percent more and in the private sector they work five more weekly hours when we go to secretaries and clerks the the pay seems more more equal although in the private sector they still work six more hours when we go to top occupations we have the reverse we have uh the private sector paying 5 000 euros and the public sector paying 3 000 euros and so you can have the misalignment working going both ways for different types of workers now what's the problem what's the problem of these wage misalignments so i'm going to read you a quote from a newspaper article on um the the job opening in the bank of italy in 2017 that highlights many of the problems of this wage misalignment so italy's chronic unemployment problem has been thrown into sharp relief after 85 000 people applied for 30 jobs at the bank the work is not glamorous one duty is feeding cash into machines that can distinguish bank notes that are counterfeit or so worn out they should no longer be in circulation the back of italy whittled down the applicants to a short list of 8 000 all of them first class graduates with solid academic record behind them they will have to sit a grueling examination in which they will be tested on statistics mathematics economics and english the high level of interest was a reflection of the state of the economy but also of the italian obsession of securing a permanent job so this quote highlights some of the problems of a very high compensation of public sector jobs the first one is it generates long queues for these jobs 85 000 people applying to 30 jobs means that they are not applying to the private sector there is lower job creation in private sector as a response and it generates higher unemployment they'll just be queuing waiting to get to trying to get in the public sector additionally it points out to another problem which is under employment in the public sector these especially when jobs and more unskilled jobs pay too well they will attract people that are more qualified to the job and because of the selection procedure based based on ranking they will be the ones that get a job so these people will be the best person for the job but they won't be the right person for the job the public sector will be wasting skills of people that could be working either in the private sector or creating companies so it's underemployment is more perversive in the public sector it also encourages the use of political and personal connections to try to jump the queue nepotism in the public sector usually it's associated with public employment but in my own research we found that it's more a symptom of this imbalance between the public and private sector when private public sector jobs they have high wages more job security and other benefits they are so attractive that if they encourage the use of uh political and personal connections to try to to jump and and and get this uh you know passing that by this other 85 000 people that wants the job generates lower entrepreneurship rates in the private sector and also um a recent paper that pietro and i have just published together with uh from from tema and it alters the types of workers the government hires so if you think you are a head of a department and you have a budget and you decide which workers you want to hire if especially at the very bottom of the distribution more low skill positions they are relatively very expensive then no one would want to hire open these positions and they prefer to open positions at a higher level that are relatively cheaper so it alters the skill mix of the government and obviously generates higher spending now what the point i want we want to come across is that we we think that the problem in many countries for most workers is at the top end so two high wages but we should be very careful about the opposite problem when wages are too low then it generates recruitment problems and it can jeopardize production and it generates an inefficient skill mix so we should be very uh very careful for different types of workers try to find the right balance between the two now and this is my my final slide is it's important to pass this message that what's important is the alignment of the total compensation of the jobs so it's not a perfect alignment of the wages with the private sector wage it's alignment of compensation so there are other benefits that have been documented in the literature of the public sector that offer uh that are valued by workers so these are lower hours as we've we've seen uh but also more minimal hours so it's actually better work-life balance more job security that's very valuable especially in countries with high unemployment but that's also better pension schemes or better health care benefits important for instance in the us so all of these characteristics of public sector jobs should be valued and it should be reflected into lower relative pay so public sector if it offers more job security then the pay should be lower than the private sector so you can maintain the compensation that the same package so when a worker is deciding do i want a public sector job or a private sector job they would select based on other characteristics namely pro social motivation um or or altruism but the the two packages would be um would have the similar value now it's uh it's hard to know uh it's not necessarily easy to know when is the wedge too high or too low but there is one uh statistic that we can use uh to find out which is the queues for public sector jobs if an application has a thousand applicants that are suitable it probably means that the wage is too high if you open a vacancy and you don't find suitable candidates then it means um it's it's too low so i'll stop now and pieter will take over trying to um think about the policy proposals um that arise from this research thank you thank you so much pedro for this introduction so the second part of the presentation is about policy proposals in order to manage this issue as pedro said and as we said during the introduction it is a very complex topic but in order to make a proposal you have to simplify things that you have to have a clear bottom line and then work on it and see whether it can be applied to different countries now the heart of the proposal is that quantity is a variable which should be political variables why wages should not basically we should have maximum flexibility when choosing employment and when choosing how many people to have in the public sector but the fixation of public wages should be removed from the political arena and determined in a different way which i'm going to describe and the goal should be a better but not perfect alignment between public wages and private wages and this is a very topical issue because this morning in the paper there is the news about 30 000 recruitments in the uh public sector in italy and uh this this is good of course and it's a part of a reform a reform which has two steps step one is to set a pay schedule and a progression structure in all jobs of the public sector and the step two is a yearly or yearly decision about wage growth how can we get to this reform in two steps first of all we need to have a good balancing of the different sectors so the benchmark as you can see in the slides should be private sector wages that's a benchmark by occupation education experience in region once we have those wages it is necessary to adjust downwards for hours because especially showed us very often people work less or fewer hours in the public sector job security differential in some countries also in italy due to different their differences in terms of pensions premiums and health care and of course this structure must be flexible enough to allow at micro level to recognize a premium to those who deserve it so we need this managerial skill and we need this kind of flexibility and there is an obvious problem which has come to the foreground right now and in some professions it is difficult to find an equivalent with the private sector think about the military general filiola in italy is going through the most difficult task is organizing the vaccine distribution all over the country we do not have an equivalent in the private sector so we should try to find some similar jobs in the private sector something that can be compared with general philolo's job is being the manager of logistics say of amazon and of course this manager has a much higher wage this is an indicator that can help us monitor the wages and to keep the queues under control because what happened to the bank of italy in 2017 is a paradox you can't have 80 000 people trying to obtain a job which is not all that interesting after all this implies a reduction of public sector wage premium for low educated or young workers or in poorer regions and we should not be scared by this because the demand for jobs in those areas would probably increase in the poor regions probably public employment should be increased also because in those areas we have a higher unemployment rate a reform cannot be made overnight we cannot think of cutting wages directly because this is not politically visible and it is not socially desirable therefore it is necessary to have a longer time horizon because italy is famous to start many things and being unable to fulfill them all and this must occur not by cutting wages but by transforming the evolution of the whole wage structure and schedule together with some regional top-up if you worked abroad say in london in the uk you probably noticed that they have london allowances there that is a wage increase for those cities where life is particularly expensive this could be applied to milan or rome in italy for instance and the government should use both hands so to say that is on one hand the government should announce wage growth changes and simultaneously should announce a quantity increase in employment offering better public services and then there is also a second step in this reform which is a yearly weight growth decision this should not be a political decision it should be made by a public commission accounting to the parliament so that we can have a growth rate of public wages which is similar to that of private wages to prevent those outliers that we saw in the picture before predominantly in southern europe and this could be done by the budget office of our parliament by the fiscal council referring to the minimum wage commission of the uk for instance i mean there are many possible agencies that could do that and that could check every year or every two years the average increase and then every five or ten years it is necessary to re-evaluate the base schedule and the progression structure which are the advantages of such a reform well first of all it can maintain parity between the two sectors private and the public one in good and bad times it reduces the scope of the government to huge wages for electoral purposes and this is a very important point next to the above mentioned parity between the two sectors during a recession usually wages decrease in the private sector but this does not happen in the public sector last year during the epidemic there was a strike of the public employment in may last year which was almost embarrassing the government and this is an advantage maintains controllable instruments related with the supply of public goods it is possible to reduce the tax burden it is a simple reform fair and easy to understand and it could bring some predictability which is one of the most extravagant variables and irrational variables like pedro showed us with the example of portugal prior to the crisis of course there are four or even more possible objections every reformer's got objections let me focus on these four important objections the first one pertains to inequality as we can read in the middle east report the economy noble prize winner has written this report showing that the government has a redistributive role but this does not mean that all economic policy instruments have to be redistributive the government aims at fighting inequality and there are different tools to do that we're talking these days of the fiscal system of taxation of inheritance tax there are many other regulatory policies such as a minimum wage for instance public wages do not resolve the problem but rather amplify it producing inefficiencies in the labor market it make sense to hire low-skilled workers in the public sector because if you reduce the wages you hire low-skilled workers does it make sense a person with a university degree in physics should actually use machines at the bank of italy to check banknotes perhaps we should allocate talents in a better way between the public and the private sector resorting to low-skilled workers we could free skilled workers for more complex tasks improving aggregate productivity and finally we're deeply convinced that political games and markets when deciding how to allocate individuals it is better to resort to market tools more criticism we are removing the possibility for politicians to control a useful instrument well if politicians are well-minded and well then they would do what we're saying so our objective is to tie the hands of bad politicians those that use public wages for campaigning purposes the government would maintain control of all the instruments regarding the supply of public goods or insurance purchases of intermediate goods investment employment transfers unemployment benefits i mean all these instruments would be maintained of course this reduces the importance of unions in the public sector but it provides a fair deal for public workers so in other words if you are employed in the public sector you earn more or less what you would earn in the private sector but are we actually sure that private wages are a good benchmark that public wages are efficiently defined what if they're not efficient and we know that in the private sector there are problems then we must use the tools to correct this so this is our idea we know that the problem is very very complex one thing is uh policy variables wages should not be a policy variable and the goal is that of having a better if not perfect alignment of public wages with the private sector and this can be done via a two-step reform number step number one set up a schedule step number two yearly wage growth decision thank you very much thank you very much peter garibaldi and pedro gomez i believe that we have enjoyed both our speakers and we have a little bit of time for questions so let's now open the debate are there any questions from the audience please just raise your hand if you want to ask a question and then use the microphone on your right so if you need to ask a question please raise your hand stand up move to the microphone and ask you a question in the meantime while you're thinking about your questions oops there's already a question good morning good morning everybody the topic is so complex that i would like to share a couple of thoughts with you these are dramatic thoughts considering the past year rigid wages in the public sector there are some sectors some areas in the public sector where extra hours are allowed so when we talk of the public contract in these sectors you also have to approach the complexity of the structure of wages the composition of wages i mean teachers are not allowed to work extra hours other public employees are allowed to do that teachers are not allowed to do extra hours but they can give private lessons i'm not talking about the fact that this is not going to be part of the text declaration however there are other areas with individuals with the medium to low qualification where extra hours are not allowed in the public sector but they are allowed in the private sector so when pedro gomez was making the comparison of wages and numbers of hours that was based on the contract not on what really happens in real life in some areas of the public sector on top of that employees are not only forbidden from working extra hours but some of them even have 40 or 50 days of paid holidays conversely in the private sector the people i know can have one week of holidays continued holidays and in peak times they may enjoy a friday saturday and sunday holiday in other words their contract holidays must be concentrated over these short periods of three days i mean on top of that there's an issue of selection in the public sector who selects people i mean in the public sector we have tenders and how do they actually select the individuals who passes these exams which are usually at the base any other question please come over to the microphone but you say well i worked in the public sector as a teacher now i'm on a pension and i would like to note that the worker should not be quantified in based on hours that you spend at school you have to take into consideration also the hours that at school at how at home you you spend in order to prepare the lessons correct the exercises and prepare for example documents because there is a lot of bureaucracy to take care of and this type of work has never been valued so teachers spend many hours at home working on the school lessons and this is not the case in other situations because i think the very few people bring their uh job home so to say so all teachers have to correct exercises also aren't teachers i was a teacher of italian and literature and i had packs and packs of exercises to correct at home thank you i'm sorry people are speaking out of the microphone we cannot hear thank you thank you for this uh very lively debate let's try and give an answer just a couple of comments and then perhaps pedro will also answer well it's true quantity hasn't only to do with the people but also the number of hours and when we go into the details of the contract uh extra hours over time is a very sensitive issue and things change between the public and the private sector however there is a very topical example that i'd like to mention at the start of his term in office president adragi proposed to continue the school year beyond june and go to school also in june and july in order to make up for the time lost so a change in the working schedule and the distribution of the workload also paid more and there has been a stronger position and i'm sorry for that personally and this is something that couldn't have happened in the private sector because if the employer asked for a change because of the pandemics or others well people would accept that and then the second comment it's true that jobs are very specific every job is different from the other it's true that the teacher brings home a lot of work as compared to a worker who works in the municipality for example so we need to have a different benchmarks and the wages should reflect those differences pedro do you have anything to say could you listen to the commenter would you like to add anything yes so um i i sympathize very much with the uh the comments of the teacher so my by myself i'm a university lecturer my wife is a doctor at the national health system my mother was also a head school in the head teacher in a primary school and my father worked in the public sector so i come from a family everyone worked in the in the in the public sector and i i do understand because myself i also bring a lot of uh work home and but i think you you both mentioned a very important point which is um the difference between what's written in the contract uh and what's specified in the contract and what happens in practice and uh for a matter of the wage it's really not so much what what the specified in the contract is actually it's actually um what happens in practice and uh i can tell you uh two so you mentioned the ones of about uh hours and um i think it's uh yeah in practice it's it can happen both both ways no you have the example of the teacher that might bring work home and work more hours and it's in the contract and you also might have the same happening in the private sector in other occupations um so this is uh the important part is you know can we get data and usually the data that we have through surveys is uh relates to actual hours worked rather than the ones so you you specify both the contract and the hours work so we can study uh these uh these differences one and another reason for instance is the for example the type of contract you have in the public sector there is also uh a lot of people that have temporary contracts uh in the in the public sector but what we find uh when we compare the probability of then being unemployed if you have a temporary contract in the public sector you are less likely to be unemployed in the following quarter than if you have a temporary contract in the private sector so although the the contracts are the same in practice they imply a different uh job um job job security so these are our two uh two very very good points and what i'm saying is that we should base our decision on what happens in practice and for that we have to uh to understand well uh the the the different the different jobs and how they are different from what the contract specifies razzi thank you pedro so a very short question please good morning i'll make reference to the example of the bank of italy that was mentioned for that humble job which required a lot of applications well i said okay that's the bank of italy i don't know what the wage was for that job but i can imagine that at the bank of italy such a job is paid much more than it would be paid in a small municipality so a similar job in a municipality that is to count the money well would have a salary is a wage which would be very very low and it wouldn't attract 8 000 people queuing up for that job and the same could happen if there were a competition for a for example a domestic worker at montecitorio for example at the um president's palace for example so it depends so in italy in the public sector wages are higher so we should also consider the heterogeneity of the wages in the public sector and this heterogeneity depends not only on some macro situations but also on the prestige that some institutions have so there are public institutions which pay more for the same job so given the same job if you work in a small municipality you will have a lower wage as compared to the same person working in a ministry for example well perhaps not a big difference but a certain level of heterogeneity and then let's consider small municipalities where normal clouds have particular jobs and they have to take decisions important decisions which involve spending public money something that in other public administrations should would be done by top managers so there is also this type of heterogeneity which should be taken into consideration when you make proposals because there are clerks in small municipalities who have to take important decisions and nevertheless they are not paid appropriately and they are paid less than top managers are taking those decisions in big public institutions so is it possible to take into consideration also that type of heterogeneity so going back to the bank of italy you don't of course you will not have a physic a graduate in physics going to counter the money at bank and italia and that's true but we should avoid the the situation of having over qualified people going to apply for such a low skilled jobs thank you pietro pedro sorry pietro well that's a paradox more than more than an example and it's particularly dramatic the difference highlighted by pedro is true at all levels of the government a central level regional level and local level so it is a situation which is replicated at all levels of government so the fact that at the bank of italy the jobs are highly paid well there is no reason for that if those 80 000 people like to work for the bank of italy okay but why should the wage be so high given also the fact that the job is secure so lastly it is not true that the public sector has a little human capital because our research work shows that in all countries the public sector recruits many more highly skilled workers as compared to the to other sectors pedro would you like to add anything to this yes so i i um i think it's it's uh a point it highlights this heterogeneity that i mentioned at the education level it also exists at the regional level and it's this um the fact that there are some workers who are underpaid in the public sector and there are other workers who are uh overpaid and that's what makes the discussion so complicated because you can always come up with specific examples uh one way or the other and this is a consequence of generally not thinking much about how much we pay and not thinking much how much we should pay when it comes um to uh to different uh at the regional level we also find uh there exists this heterogeneity but it's it's actually tends to be the public sector wage premium is higher in in general poorer regions so in in italy the public sector premium is higher in the south and in the islands because if you think about just someone working in the in the council or in the municipality there is uh the the idea of equal pay for equal workers means that worker in milan in the same position as in naples earned the same but earning a thousand euros in milan is not earning it's not the same as earning a thousand euros in uh in naples uh having said that you you are right uh you what you point that there are people who need to make important decisions and they are not really well paid well this because we are thinking about some people in the very in the very top and uh what's what is important is along the distribution we have to have a discussion that shouldn't uh have any any complexes and and it shouldn't be this idea that we should either cut wages to everyone or increase wages to everyone we just have to think carefully uh about how to to to set the wages and how to incorporate all these other factors and um of the different characteristics into pay and um i think as a situation now where societies are are so polarized it's it's it's a conversation that it's hard to have but it's uh it's it's very important if we want to improve the the the services um in the in the public sector thank you very much pedro i believe that our time is over and i would like to conclude by saying the following trying to summarize the different prospects and evaluations that have emerged in this debate peter garibaldi has emphasized redistribution through public wages is not the only way and i believe that in a post-pandemic a period it is necessary to think about this the proposal that has been made aims at widening our perspective and changing it so today's debate has unveiled the complexity of this topic and its significance as well so thank you very much to the audience for participating also in the debate and i would like to attend the festival for organizing all this thank you very much peter garibaldi thank you very much peter gomez and enjoy the rest of the festival you