The annual turnover attributable to irregular work in Italy amounts to 68 billion euros. Approximately 35% of this added value produced by the underground economy is attributable to the regions of the South. This is what emerges from an analysis conducted by the Cgia Research Office. The report also highlights that the people involved in the underground economy in our country are just under 3 million and also in this case the South is the geographical area of the country with the highest percentage: 37.2% of the total. However, the phenomenon has now also extended to the Centre-North and has a record presence especially in the sector of personal services (housekeepers, carers, etc.). The rate of irregularity in this sector reaches 42.6%. In second place we see agriculture with 16.8% and in third place construction with 13.3%. The added value produced in 2021 by irregular work in Italy was equal to 68 billion euros, of which 23.7 billion in the South, 17.3 in the Northwest, 14.5 in the Center and 12.4 in the Northeast. If we measure the percentage incidence of this amount on the total regional added value, the highest share, equal to 8.3%, concerns Calabria. Campania follows with 6.9%, Sicily with 6.6% and Puglia with 6.2%. The national average is 4.2%.
Of the 2,848,100 irregular workers estimated in Italy by Istat, 1,061,900 are located in the South, 691,300 in the Northwest, 630,000 in the Center and 464,900 in the Northeast. If we calculate the irregularity rate, given by the ratio between the number of irregular workers and the total number of workers employed per region, the most significant presence is always recorded in the South and, in particular, in Calabria with 19.6%. Campania follows with 16.5% and Sicily with 16%. The average Italian figure is 11.3%. The Cgia also underlines that the 3 million standard work units (ULA) present in Italy who carry out a work activity in clear violation of tax, contribution and safety regulations, “provoke” an irregularity rate of 12.7%. Other personal services is the sector that “nests” the largest number of irregular workers: precisely just over a million ULA which gives rise to an irregularity rate in this sector of 42.6%. Among the sectors most affected by undeclared work we see agriculture which, according to the elaboration carried out by the CGIA Research Office, has an irregularity rate of 16.8% (205,800 ULA). Below we see construction with 13.3% (220,200 ULA) and commerce, transport, hospitality with 12.7% (691,700 ULA). Net of those who work in personal care services, it should be noted that for the other sectors where there is more undeclared work, the risk of accidents in the workplace is also higher.
The investigation also shows that after the economic crisis caused by the pandemic, in some areas of the country, important parts of the economy have come under the control of mafia-style criminal organizations that have combined massive economic investments with the use of violence, threats and the seizure of documents to “win” the favor of large masses of workers, especially foreigners. The application of these coercions has transformed many pockets of the underground economy into forced labor, causing many Italians who were in vulnerable conditions to slip into this infernal circle. The phenomenon of undeclared/forced labor has always been linked to gangmastering. Indeed, in many cases the former is the antechamber of the latter; not only in agriculture or construction, but also in textiles, logistics, delivery and assistance services. Those exploited are the most fragile, such as people in extreme poverty, immigrants and women. The sector most affected by this social and economic plague is certainly agriculture. The exploitation of labor in this sector can be traced back to the simultaneous presence of these critical issues: the massive use of labor force for short periods and in isolated places, which often lead to the creation of informal housing settlements; the inadequate conditions of both transportation and accommodation services; the precarious or irregular legal status of several migrant workers. Gangmastering phenomena to the detriment of immigrants, reports the Cgia, have been present for many decades in the Agro Pontino (LT), in the Agro nocerino-sarnese (SA), in Villa Literno (CE), in the Capitanata area (FG) and in the Piana di Gioia Tauro (RC).
(Source: Agi.it)
What are the main causes of the shadow economy in Italy?
Table of Contents
The Shadow Economy in Italy: A Growing Concern
Italy’s underground economy is a pressing issue that has been plaguing the country for years. According to a recent analysis by the Cgia Research Office, the annual turnover attributable to irregular work in Italy amounts to a staggering 68 billion euros. This staggering figure represents approximately 4.2% of the country’s total added value. The South of Italy is disproportionately affected, with 35% of this added value produced by the underground economy in this region.
The Scale of Irregular Work in Italy
The report highlights that around 3 million people are involved in irregular work in Italy, with the South being the geographical area with the highest percentage, accounting for 37.2% of the total. This phenomenon is not limited to the South, however, as it has also spread to the Centre-North regions. The sector most affected by irregular work is personal services, such as housekeepers and caregivers, with a rate of irregularity reaching 42.6%. Agriculture and construction follow closely, with rates of 16.8% and 13.3%, respectively.
Regional Breakdown
The added value produced by irregular work in Italy varies significantly by region. The South accounts for 23.7 billion euros, followed by the Northwest with 17.3 billion euros, the Centre with 14.5 billion euros, and the Northeast with 12.4 billion euros. When measured as a percentage of total regional added value, Calabria has the highest share at 8.3%, followed by Campania at 6.9%, Sicily at 6.6%, and Puglia at 6.2%.
Irregular Workers
Of the estimated 2,848,100 irregular workers in Italy, 1,061,900 are located in the South, 691,300 in the Northwest, 630,000 in the Centre, and 464,900 in the Northeast. The irregularity rate, calculated as the ratio between the number of irregular workers and the total number of workers employed per region, is highest in the South, particularly in Calabria with 19.6%, Campania with 16.5%, and Sicily with 16%.
Other Personal Services: A Hub for Irregular Work
The sector that ”nests” the largest number of irregular workers is other personal services, with over a million standard work units (ULA) involved, resulting in an irregularity rate of 42.6%. Agriculture and construction follow, with irregularity rates of 16.8% and 13.3%, respectively. It is noteworthy that the risk of workplace accidents is higher in these sectors.
The Rise of Forced Labor
Unfortunately, the economic crisis caused by the pandemic has led to the growth of mafia-style criminal organizations that have taken control of significant portions of the economy in some areas of the country. These organizations use violence, threats, and document seizure to exploit large numbers of workers, especially foreigners, leading to forced labor. This phenomenon is often linked to gangmastering, which affects not only agriculture and construction but also textiles, logistics, delivery, and assistance services. The most vulnerable individuals, including those in extreme poverty, immigrants, and women, are often exploited.
Agriculture: A Sector Plagued by Exploitation
Agriculture is particularly affected by this social and economic plague, with the exploitation of labor often linked to the simultaneous presence of critical issues, such as the massive use of labor force for short periods and in isolated places, inadequate transportation and accommodation services, and precarious or irregular legal status of migrant workers. Gangmastering phenomena have been present for decades in areas such as Agro Pontino, Agro nocerino-sarnese, Villa Literno, Capitanata, and Piana di Gioia Tauro.
Conclusion
The underground economy is a pressing issue in Italy, with far-reaching consequences for the country’s economy and society. The growth of irregular work and forced labor is a symptom of deeper structural problems that need to be addressed. It is essential for policymakers, businesses, and civil society to work together to create a more equitable and transparent economy that benefits all citizens.
Keywords: irregular work, underground economy, Italy, personal services, agriculture, construction, forced labor, gangmastering, mafia-style criminal organizations, exploitation, economic crisis, pandemic.
What are the primary sectors contributing to irregular work in Italy?
The Alarming Scale of Irregular Work in Italy: A €68 Billion Problem
Italy is grappling with a significant issue of irregular work, with an estimated annual turnover of €68 billion. According to a recent analysis by the Cgia Research Office, approximately 35% of this added value produced by the underground economy is attributed to the regions of the South. This alarming phenomenon affects not only the economy but also the lives of millions of workers, many of whom are forced into irregular and exploitative labor conditions.
The South’s Gripping Hold on Irregular Work
The data reveals that the South is the geographic area with the highest percentage of irregular workers, accounting for 37.2% of the total. The regions of Calabria, Campania, Sicily, and Puglia are particularly affected, with Calabria having the highest share of irregular work at 8.3% of the total regional added value.
Personal Services: The Sector Most Affected by Irregular Work
The report highlights that personal services, including housekeepers and caregivers, are the sectors most affected by irregular work, with an irregularity rate of 42.6%. Agriculture follows closely, with 16.8% of irregular work, while construction comes in third with 13.3%.
The Faces of Irregular Work: 3 Million Standard Work Units
The data shows that there are approximately 3 million standard work units (ULA) in Italy that carry out work activities in violation of tax, contribution, and safety regulations. This translates to an irregularity rate of 12.7%. The sectors most affected are personal services, agriculture, construction, and commerce, transport, and hospitality.
The Dark Reality of Forced Labor
The investigation also sheds light on the disturbing presence of mafia-style criminal organizations that have taken control of large parts of the economy, using violence, threats, and coercion to exploit workers, particularly foreigners. This has led to the transformation of many pockets of the underground economy into forced labor, affecting vulnerable individuals and perpetuating social and economic injustice.
Agriculture: The Sector Most Affected by Forced Labor
Agriculture is the sector most affected by forced labor, with the exploitation of workers often linked to gangmastering. The use of labor force for short periods, inadequate living conditions, and irregular legal status of migrant workers create an environment conducive to exploitation.
Breaking the Cycle of Irregular Work
The data paints a stark picture of the reality of irregular work in Italy, with far-reaching consequences for the economy, workers, and society as a whole. It is essential to address the root causes of this phenomenon and implement measures to prevent exploitation, promote fair labor practices, and protect the rights of workers.
Sources:
Agi.it
Cgia Research Office
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