Italy is one of the three European Union countries in which real disposable income has decreased compared to 2010. The latest report reports this Eurostat on living conditions, according to which, net of inflation, Italians’ income fell by 2.8% in real terms, reaching 97.2 on a 2010 basis = 100.
Meanwhile, in much of Europe between 2010 and 2014 citizens recorded very significant increases, on average 20.4%. Suffice it to say that in Romania real income grew by 162%, in Poland, Croatia, Hungary and the Baltic countries by 50%.
What does a real income at 97.2 mean
Eurostat indicates that Italy’s real income is equal to 97.2 on a 2010 basis = 100. It means that the average purchasing power of Italian families is now 2.8% lower than in 2010.
In practice, with the same amount of disposable income, Italians can afford fewer goods and services than fifteen years ago.
The index 100 represents the real income level of 2010, chosen as the reference year. Values above 100 indicate a real increase in income (i.e. growth net of inflation), while values below indicate a loss of purchasing power. In 2024, the European average stood at 120.4, more than 20% real compared to 2010.
In 2008 Italian income was higher
If we broaden the horizon beyond 2010, the picture becomes even clearer. According to the complete time series of EurostatItalians’ real income reached its peak in 2008, before the global financial crisis.
Since then, average purchasing power has reduced by around 7%, a sign that in 16 years Italians have become poorer in real terms, even if nominal incomes have grown.
In practice, today you need 106 euros to buy what cost 100 in 2008: a silent but constant loss, which explains why the perception of well-being remains low even in periods of economic growth.
Why “real” incomes matter
Real income measures disposable income adjusted for inflation. In other words, it shows how much spending capacity citizens really have after the price increases.
A country may have nominally higher wages, but if prices rise faster, purchasing power decreases. And that’s what happened in Italy. In recent years the increase in the cost of living has not been accompanied by coherent wage dynamics, and the result is a slow decline in the real wealth of families.
Europe runs, Italy doesn’t: the comparison
In the rest of Europe real incomes are growing, in Italy they are not. From 2010 to 2024, second Eurostatmost EU countries saw a net increase in purchasing power: in Romania real income more than doubled (+162%), in Poland, Croatia and Hungary the increase exceeded 50%, and in the Baltic countries the growth was even more marked.
Italy, however, has lost ground. Real median income fell by 2.8%, a figure that places us together with Greece (-25.8%) and France (-1.7%) among the economies left behind.
In much of the Union, families today have more spending power than they did 15 years ago. In Italy that capacity has eroded. The comparison is merciless: while other countries have recovered competitiveness, wages and productivity, we have maintained a fragile equilibrium, in which nominal income grows but real income is no longer enough to compensate for the increase in prices.
The result is stagnant purchasing power and a growing distance from the more dynamic economies of Northern and Eastern Europe.
The reasons for Italian stagnation
Understanding why real incomes in Italy are not growing means looking beyond the numbers. The cause is not just one, but a set of factors that feed on each other.
For years, the country has suffered from low productivity, especially in traditional sectors, and a rigid wage structure, which is unable to keep pace with inflation and the improvements of other European partners.
Added to this is the spread of precarious contracts, often concentrated in services and tourism, which although limiting unemployment do not produce stable income. The share of low-income self-employed workers also remains among the highest in Europe, and contributes to maintaining the average value of overall incomes at modest levels.
Then there is the issue of investments in innovation, which in Italy continue to be lower than the EU average. Low spending on research and development, the fragmentation of the productive fabric and the advanced age of the workforce hinder the country’s ability to create added value.
The result is an economy that grows little, and when it grows, it is unable to transform that growth into real well-being for Italians, who see their purchasing power decline and are unable to save.
