Looking to 2007: Italy Times Two
Stanton H. Burnett
Stefano Vaccara
Center for Strategic & International Studies (CSIS)
Occasional Reports in European Studies
November 1999
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THE MEZZOGIORNO
Lavoro Nero
. . .
But the third factor, somewhat alleviating the second, is the existence of a far vaster private sector than ever shows up in the economic statistics. The size of the lavoro nero sector and the black market in the South clearly exceeds that of any other EU region, a fact that can now be persuasively demonstrated. According to Italstat, the most reliable source of national economic statistics, "black" labor in the Mezzogiorno amounted to an even fifty percent of all "jobs" by the end of 1998. Six months later, Italstat raised its figure to 51 percent. The figure for the North was bad enough -- 31.5 percent -- but more in line with other Mediterranean EU countries. For any projection toward 2007, however, it is the trend that must be noted. Italstat found that the gap between North and South was growing continually wider. Indeed, when actual laborers were counted (rather than jobs), the South's percentage was double that of the North and Center.
These raw figures require a closer look, because one economist's analysis of Calabria found low pay, high unemployment, and a very high level of consumer spending. In 1994, the government insurance agency placed the number of business enterprises in Calabria at 23,758, while Istat, carrying out the 1996 census, found about 90,000 businesses in the same region. The economist Domenico Marino concluded, on the basis of 4,000 interviews in Calabria, that 75 percent of the Calabrian work force would refuse a fairly low-paying job, despite a very high official level of unemployment. In Calabria, with its dire employment figures, 84 percent of the families own their own home. What such anomalies must mean is that real income in Calabria is far higher than what is "on the books." Many among the vast numbers of officially unemployed are, in fact, partly or fully employed. They are earning no social benefits, but they are earning the daily lire that keep their families afloat.
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A very large part of the South's hidden labor is made up of entrepreneurs, sometimes also employing black labor, and existing themselves outside official recognition, taxation, protection, control, or counting. A recent analysis concludes that "there exists in several zones of the Mezzogiorno a whole fabric of small and very small businesses that escape every census, but that work and make profits, share among themselves a serious level of production, export to other regions [of Italy] and abroad." A map of the South's submerged economy shows a series of ink blots in every region, "where work is done without any controls, safe from the tax collector but not safe from accidents and injuries, usually in violation of a number of laws [governing commercial outlets, working conditions, etc.], totally outside official cognizance."
Every year brings plans either to stamp out or to "regularize" the South's submerged economy. But a professor of political economy at the University of Naples warns to go slow: "if we observe these initiatives carefully the image of a Mezzogiorno that is forever the panhandler does not seem to be confirmed. What confronts us is a creeping vitality, almost a new frontier." According to Professor Meldolesi, the submerged economy is several times bigger than officially estimated.
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In most cases, "black" workers suffer no risk from the State. Controls on black labor are few and not enforced. Yet they live dangerously. They work -- sometimes doing heavy and dangerous work -- with no social net, no pensions (other than the minimal social security that everybody gets), no other welfare assistance, no protection at the work place, and no control over labor conditions. The State is nowhere present in their lives, as either law-enforcer or protector.
This massive sector skews all the statistics. It means that the GDP for the Italian South (and for Italy as a whole) is far from accurate. And the unemployment figures do not reflect reality.
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