Whatever the politicians say, the scariest part of any recession can be
expressed in one simple word: Unemployment.
Each country has its own criteria and definition of what constitutes the
national unemployment rate, but anybody who sincerely believes that Italy's
current (April 2010) unemployment level is really only 8.7%, compared to
9.7% in the United States, should book a place on the next Alitalia space
flight for Fantasy World. Then there are the statistics on "youth unemployment," which in Italy could mean just
about anything. Here the "official" figure is a more credible
26%, still understated but at least in the universe of plausibility. This
does not even touch on the "poverty level" as defined by ISTAT
(Italy's national statistics institute), or the more credible fact of extremely
low salaries throughout Italy but especially in the South. In Italy the
official GDP figures are just as unreliable as the employment numbers presented
for public consumption. It's better to focus on observable realities.
It's important to bear in mind that the "real" unemployment
level anyplace is often higher than the "official" one. In the
American state of Michigan, for example, the actual unemployment level is
estimated at 20% if not higher.
Factories and other businesses are closing throughout Italy as part of
a serious economic crisis which began at least two years before the current
"credit crunch" suffered since 2008. Italian politicians like
to say that Italy's banks were less involved in the events leading to the
current recession than those of Britain, Germany and the United States.
This is true, strictly speaking, but the aftershocks in Italy's economy
have been catastrophic - particularly in tourism and in industries such
as fashion and furniture-making. The government now admits that Italy's
exports are at their lowest level since 1969.
If the current recession seems less evident in Sicily than elsewhere
in Italy it is only because the local economy was already a disaster, with
chronically high, long-term unemployment hovering around an astounding,
frightening 25% (if not more), accompanied by a terrible rate of underemployment
- people working at jobs which don't pay nearly enough to live on, for example
a call centre position paying around 600 euros per month. Accurate figures
are scarce in a place where tax evasion is a way of life, but officially
the average Italian household has an annual income of around 26,000 euros
while the average in Sicily is around 16,000. About fifty percent of Italians
declare earnings of less that 15,000 euros per year, while fewer than one
percent declare 100,000 or more. The underground economy is especially large
Here are some facts based on recent developments.
The FIAT plant in Termini Imerese, which has always been propped up with
tax breaks, numerous incentives and barrels of public money, is scheduled
to close in a year or two. This is not the first time FIAT has considered
closing the plant (we wrote about it years ago), but it looks as if this
time it will actually close. The situation prompted an article by the Wall
More immediately, Palermo's ship yard, which nowadays constructs oil
rigs and other platforms more than ships, fills its last contract in July,
with no more scheduled. This will bring layoffs.
Italtel's electronics assembly plant outside Carini is planning cutbacks.
Their recent protest is shown here, and while street protests are nothing
new in Italy those of the last year have been undertaken with a certain
sense of urgency. They're not just an excuse to make noise and detour traffic.
In each of these cases, the jobs will probably end up overseas, if anywhere
- possibly in Eastern Europe (yet perhaps in EU countries such as Poland
or Romania), effectively lost forever. This phenomenon is certainly related
to the recession, but its causes cannot be said to be rooted directly in
the credit crunch. What we're seeing is really an indirect effect, part
of a chain reaction or even a parallel development. That's academic. The
point is that Sicilian jobs are disappearing, just as manufacturing jobs
are vanishing in the rest of Italy.
Then there's the question of the various "make-work" programmes
and low-paying public-sector jobs. For example, when the publicly-funded
agency that handled ticket sales at historical sites went under hundreds
of jobs were lost. Strangely - though not too bizarre by local standards
- the regional government now plans to assign management of the sites to
a number of smaller agencies and organisations instead of assuming direct
administration itself. The cycle of corruption continues.
In a field where only the strongest survive, a number of tour operators
have either closed or scaled down their operations. This has led to (for
example) some tour guides working less, and villa rental agencies in Sicily discounting rentals to an amazing extent.
But some of the most unfortunate - and most visible - results of the
recession in Sicily strike at the heart of the underclass. The last two
years have seen the openings of dozens of betting and gaming businesses
around Sicily, particularly in larger cities like Catania and Palermo, and
the installation of electronic slot machines and such in coffee bars and
other places, with lotteries more popular than ever.
In tandem with this sad development, pawn shops specialising in the purchase
of gold (far below the market rate) have sprung up like mushrooms after
the rain, not only in larger cities but in towns as well. (One such shop
is shown here.)
While the Italian government, recently branded the most corrupt of the
European Union, understates the national unemployment rate, it admits that
unemployment benefit claims are at their highest level in decades. Some
things are not easy to conceal. Nepotism, for example,
remains a reality in the Sicilian workplace, and so does corruption;
the underclass suffers most during any economic
Certain sectors of the economy are showing signs of life. Tourism is
improving slightly this year, and for the curious traveller Sicily is just
as inviting as ever. Agriculture is stable, though underdeveloped - the
olive oil and wine taste just as good now as they did before the recession.
Unfortunately, the economy of a region populated by over five million can't
survive on a single industry.
About the Author: Maria Luisa Romano has
written about social topics for various Italian magazines, including this one.