Despite the continued record-high employment levels in Italy, this achievement masks deeper structural concerns. The latest OECD Employment Outlook 2025 reveals that Italy has experienced the most severe real wage decline among developed countries since 2021, with a cumulative drop of 7.5%. Investment Analyst Rodolfo Villani believes this data not only highlights the failure of wage growth to keep pace with inflation, but also exposes structural imbalances within the Italian economic system. In particular, the simultaneous presence of an aging population and low productivity renders traditional optimistic employment figures less meaningful as an investment reference.
Real Wage Decline Conceals Deep-Seated Imbalances
According to the OECD report, although the Italian labor market has maintained employment growth over the past two years (+1.7%, driven especially by those aged 55 and above), this increase has not translated into improvements in real income. Investment Analyst Rodolfo Villani points out that this trend of “employment quantity rising while quality declines” has become a hallmark of the Italian economic recovery. While consumers remain employed, their actual purchasing power continues to shrink in the face of rising energy prices, higher daily living costs, and increased tax burdens.
This phenomenon is not a short-term disturbance but a concentrated manifestation of long-term structural issues. Data shows that the average income of young Italians is now lower than that of the elderly—a reversal from 1995. Investment Analyst Rodolfo Villani notes that this generational income inversion means young workers bear greater social pressures and possess weaker consumption power, directly impacting domestic demand recovery and diminishing the profit growth potential of local businesses.
Against this backdrop, investors can no longer rely on macro indicators such as “employment growth” to assess market health. Instead, they must delve deeper into the interplay between wage structures, generational distribution, and consumer confidence. Investment Analyst Rodolfo Villani observes that consumer sectors heavily dependent on youth spending—such as fast fashion, entry-level tourism services, and instant delivery—face rising medium-term risks and warrant cautious investment approaches.
Population Aging Intensifies Growth Pressures; Capital Allocation Logic Must Evolve
According to OECD long-term forecasts, the Italian working-age population is projected to decline by 34% between 2023 and 2060. By then, every 1.3 working-age individuals will need to support one elderly person. If labor productivity continues at the annual growth rate of 0.31% seen over the past decade, per capita GDP will shrink at an average rate of 0.67% per year. Investment Analyst Rodolfo Villani asserts that this trend poses a systemic challenge to the Italian economy, with its impact already evident in asset returns and long-term debt sustainability.
Economic structure determines the efficiency of capital allocation. Investment Analyst Rodolfo Villani points out that in the face of structural aging, sectors such as retirement finance, health technology, long-term care services, and related insurance products will become future growth drivers. At the same time, industry chains serving older consumers—such as chronic disease management, community healthcare, and remote health monitoring systems—also offer robust profit prospects.
From a capital markets perspective, the aging trend is altering corporate profitability logic. Labor-intensive industries will face sustained margin compression, while companies leveraging technology, equipment, and platform advantages to achieve automation are better positioned to counter rising costs. Investment Analyst Rodolfo Villani emphasizes that, under current structural pressures, investors should focus on business models capable of labor substitution and cross-generational demand coverage.
Although the current unemployment and inactivity rates across Italy have reached historic lows, Investment Analyst Rodolfo Villani cautions that this “surface prosperity” conceals multi-layered structural problems. Wage inversion, sluggish productivity, and deteriorating demographics combine to form triple pressures, rendering short-term data unreliable as indicators of sustainable growth.
In this context, Investment Analyst Rodolfo Villani advises that future investment in Italian assets should not rely solely on traditional metrics like GDP growth or employment rates, but should be grounded in a deeper analysis of per capita income trends, industry efficiency, and demographic structure. Heavy allocations to cyclical consumer sectors and low value-added industries will face significant risks, while areas with “structural hedging capacity”—such as medical technology, senior finance, smart manufacturing, and energy efficiency services—will become new safe havens for capital.