Jan. 27 (Bloomberg) -- In just about any other country in the world, Pietro Ichino’s biggest career liability would be finding himself alone in a corner at cocktail parties. Ichino is a professor of labor law. In Italy, that means his life is under threat.
For the past 10 years, the academic and parliamentarian has lived under armed escort, traveling exclusively by armored car, and almost never without the company of two plainclothes policemen. The protection is provided by the Italian government, which has reason to believe that people want to murder Ichino for his views.
Ichino had just gotten off the plane when I met him at the airport in Rome, and he was already accompanied by his detail: two unsmiling men in jeans and black jackets and those overshined street shoes that only cops out of uniform seem to wear. Ichino wore a suit and eyeglasses. He is tall and wiry, with a thin face and a prominent nose. If a cartoonist were to draw him as an animal, he probably would choose a bird of prey. Without a word to his bodyguards, Ichino walked into an Alitalia first class lounge and let the sliding glass doors close behind us.
On Nov. 8, Ichino published Inquiry into Labor, his 19th book, in which he argues for an overhaul of Italy’s congealed jobs market. The Ichino Plan, as it has come to be known in the Italian press, takes aim at one of the country’s hottest political issues: a law, dating back to the 1970s, that protects workers from being fired for anything short of the most egregious behavior. Ichino argues that Italian companies can’t compete in a global economy until the country’s labor regulations are reformed -- a view that is gaining currency in the political Establishment. With Italy’s borrowing costs now at about 6 percent for the 10-year bond and the increasing possibility of a sovereign-debt default, the new government has introduced sweeping economic reforms to kick-start growth, which has been averaging .27 percent a year for the past decade. At stake is not just Italy’s long-term solvency but the survival of the euro zone itself.
All this has made Ichino a wanted man in more ways than one. Since 2008 he has served as a senator in the Democratic Party’s center-left coalition. Last fall he was briefly considered for a Cabinet position in the technocratic government headed by Prime Minister Mario Monti. Though he didn’t get the post, Ichino remains in high demand by parliamentary committee chiefs and talk show producers alike.
Fire at Will
As Ichino sees it, labor reform in Italy shouldn’t be controversial. Italians may consider the current labor arrangement a natural right, but it prevents companies from downsizing in times of trouble and discourages them from hiring during periods of growth. Ichino’s proposals would allow companies to fire at will, but require them to provide generous unemployment benefits and training for laid-off employees seeking to re-enter the job market, a safety net that would still make the country’s workers among the most protected in the world. “We’d still be far from the ranks of countries where it’s ‘hire and fire,’ ” Ichino says. And yet, there we were: discussing labor reform, with the police standing guard outside the door.
Ichino was born in 1949 into what his younger brother Andrea Ichino -- an economist with whom he works closely -- describes as a “wealthy, bourgeois family, with many generations of educated people.” His mother was ethnically Jewish but converted to Catholicism in the 1920s. His father was an Italian officer who spent two years in a German concentration camp. Both were lawyers. His father worked first in civil law, and later in labor law. His mother organized one of Italy’s first foster care programs. They raised their children in an environment that stressed education, community service, and the left-wing Catholic teachings of such thinkers as Don Lorenzo Milani, whose anti-capitalist message challenged the church hierarchy.
Ichino became politically active in secondary school, during the first stirring of the student movement of the 1960s. Upon graduation from secondary school he went to work as an official in one of Italy’s largest unions, Fiom-Cgil; later he coordinated the legal services for labor activists in Milan. In 1979 he was elected to Parliament as a member of the Communist Party, then the standard bearer for Italy’s center left. As one of Italy’s youngest parliamentarians, Ichino appeared to have a bright political future. And then he wrote a book that took on the country’s labor laws.
At the time, Italian companies were restricted in whom they could hire. Unemployed workers submitted their qualifications to a government office, which put their names on a waiting list. Employers looking for new talent were required to take the next person on this list. The intent was to prevent discrimination during the hiring process. The effect was the opposite: Companies got around the rule by poaching workers from other companies. It became easy to switch jobs, but almost impossible to find the first one. Ichino’s book, published in 1982, challenged this system, arguing that companies should have their pick of prospective job candidates. His fellow Communists weren’t pleased. When he ran for re-election to his parliamentary seat the following year, he lost in a landslide.
Labor and Capital
Ichino had stepped into the heart of one of Italy’s most fraught and violent divisions: the battle between labor and capital. In the 1970s and ‘80s, in what became known as the Years of Lead (for all of the bullets flying through the air), extremist militants from both sides of the political spectrum carried out campaigns of escalating terrorism and murder. On the right, bands of neo-Fascists planted bombs and planned coups. But the real action happened on the left. Groups flying the red flag of international communism assassinated police officers and professors, culminating in the 1978 kidnapping and murder of Aldo Moro, a former Italian Prime Minister, by a group that called itself the Red Brigades. That operation was followed in 1981 by the kidnapping of an American general, James L. Dozier, who was held for 42 days before being rescued by Italian special forces. Other killings followed, including that of an Italian general, until 1988, when the Red Brigades disbanded under heavy police pressure and went dormant -- though not completely.
In 2002 a professor of labor law named Marco Biagi was assassinated as he dismounted from his bicycle in front of his home in the old Jewish ghetto of Bologna. Two men pulled up on a motor scooter, their faces covered by their crash helmets. One fired four shots from a pistol. Biagi was struck twice in the nape of the neck. It was March 19, Father’s Day in Italy. His wife and two teenage sons came running down the stairs and found his body crumpled outside the front door.
Ichino knew the murdered man well. After losing his seat in Parliament, Ichino had spent two decades working as a lawyer and a professor. Biagi traveled once a week to Milan to teach a course in the master’s program that Ichino ran. The two sometimes met in the cafeteria for lunch. Each penned regular columns for major dailies -- mostly on labor issues -- and they sometimes read each other’s pieces before publication. At the time of his assassination, Biagi had been advising Prime Minister Silvio Berlusconi’s government on how to reform the country’s labor laws. At the top of the agenda was an effort to abolish the measures protecting workers from being fired. “We were very close, even if we didn’t always think in the same way,” says Ichino.
After Biagi’s death, the Italian secret service admitted that they had received warnings that a new generation of the Red Brigades was targeting professors. Italian authorities have since disclosed that the group’s hit list included not only Biagi but also Ichino and a professor of industrial economics named Carlo Dell’Aringa. After Biagi’s murder, Ichino and Dell’Aringa were immediately put under armed guard. Ichino’s daughter Anna Ichino, now pursuing a doctorate in philosophy at the University of Nottingham, remembers that every morning, on her way out of the house, she’d pass the police in the yard. She got used to calibrating her level of concern to the size of her father’s escort. One armored car was O.K.; if there was a chase vehicle, her anxiety rose. “I was quite scared,” she recalls. “I had long periods of insomnia.” On the rare occasions the family ate out, the bodyguards kept watch at a nearby table.
Ichino, by nature formal and austere, withdrew deeper into his work. “Sometimes I think he’s like a person without [emotions],” says Anna. “He’s never hanging out or relaxing.” At night, when she still lived with her parents, Anna would sometimes hear her father up in the middle of the night. The next morning, he would behave as if nothing had happened. Even today, the only time Ichino’s family sees him unwind is when he’s playing with his two-year-old grandson or hiking or biking in the mountains. Says Federico Picinali, Ichino’s nephew, godson, and climbing companion: “It’s the only time in his everyday life that he can do something without being followed by the guards.”
For those promoting changes to Italy’s labor laws, the day of Biagi’s shooting has become a rallying point. Sympathizers gather every March 19 to ride their bicycles from the train station to the dead man’s house. The year after his death, the Italian government passed a law in his name that made sweeping changes to the country’s labor laws. The bill left untouched the provisions protecting workers from being fired, but it injected flexibility by allowing companies to take on workers for fixed projects and limited times without granting the extensive protection due to those with traditional fixed contracts.
In the wake of the Biagi legislation, unemployment had dropped, as companies exploited the new options. But the law did little to address the divide that had split the Italian labor force. On one side stand those workers with long-term contracts, who are fully protected from being fired. On the other sit people like Salvo Barrano, a young archeologist. Freelancers like him are under continuously rolled-over, short-term contracts. They have work, but very little job security. Together with those toiling in the black market, they make up the majority of Italy’s workforce.
Not only do Barrano and his peers generally have lower salaries and less job security than previous generations, they don’t have many of the basic rights Italians have come to expect: sick pay, maternity leave, any type of unemployment insurance. Barrano contrasts his experience with that of his parents. “From the time when they were 25 years old, they could count on an income that was stable, secure, and guaranteed for the rest of their lives,” he says. When they retired, they received a pension set at 80 percent of their last salary and a bonus big enough that his father was able to realize his dream of buying a house by the sea. “As retirees, their standard of living went up,” Barrano says. “It didn’t diminish.” Italy’s labor laws seem to have backfired. Rather than protecting all workers, they have elevated a few into places of privilege and barred entrance to the majority. “It feels like a scam,” Barrano says.
That’s why Ichino insists his crusade is as much moral as it is economic. He continues to view his efforts as driven by the same philosophy that motivated his entrance into politics: as a fight for workers’ rights. Replacing the absolute protection from being fired with robust unemployment insurance, he reasons, would open the doors to the marketplace to all workers, benefiting not only the companies but the labor force as well. “We have maintained the same ideals as we had in the 1970s,” says Ichino’s brother, Andrea. “It’s the unions that have changed. They’re now protecting the rentiers, the insiders, the ancien régime.” With the ouster of Berlusconi’s nominally center-right government, the types of reforms favored by Ichino have been given a chance to see the light. Mario Monti, whom Ichino considers a colleague and a friend, has expressed interest in Ichino’s proposal and has said reform of the country’s labor laws must be part of a pro-growth agenda.
In the 10 years since Biagi’s shooting, Ichino says he twice felt comfortable enough to ask that his escort be dropped. Both times, the request was refused. In 2005, five members of the new incarnation of the Red Brigades were given long prison sentences for Biagi’s murder. The following year, the police arrested another group that they said had been plotting Ichino’s assassination. The group included two students from his department. Last fall, Carlo Dell’Aringa -- the professor whose name had appeared on the same hit list as Biagi and Ichino -- received a death threat, written in red ink on the wall of his university’s bathroom. It was signed with the five-pointed star of the Red Brigades.
Even so, Ichino is increasingly convinced that his ideas for changing Italy’s economy will eventually become real. “The problem is that we can no longer afford delays,” he says. “The situation in Italy today requires an acceleration.” In our meeting at the airport, he pointed to other successful battles he had taken on and won -- most recently an effort to decentralize collective bargaining. “My life has been dedicated to make sure these things take root in the left,” he says. “They always come around a bit late, but at least they come around.” It was time for him to head toward his next appointment. I followed him out of the lounge, to where his bodyguards were waiting for him, and then through the sliding glass doors and out of the terminal. The professor got into his armored car, and his escort slowly drove him away.
To contact the editors responsible for this story: Tim Quinson at firstname.lastname@example.org.