The Italian Job Market Is So Bad That Workers Are Giving Up in Droves

As Italy emerges from recession, job creation is top priority

ITALIAN UNEMPLOYMENT UNCHANGED
Photographer: GIUSEPPE ARESU/BLOOMBERG NEWS

Seven years of economic setbacks can break one's spirit. At least that seems to be the case in Italy, where many of the unemployed are losing hope of finding a job.

The International Labour Organization gives unemployment status only to people who made at least one job-seeking effort in the last 30 days. According to the European Union's statistics agency, almost 4.5 million Italians who are willing to work failed to make such an effort in the first quarter. That's the most since the series started in 1998.

The following chart shows how the number of Italians willing to work but not actively seeking a job (red line) is consistently higher than those who actively seek employment (blue line). 

 

For every 100 working Italians, there are 15 people seeking a job and another 20 willing to work but not actively searching, the highest level among the 28 EU countries, according to statistics agency Eurostat.

Driven by survival necessity, Greeks are much more active compared to Italians, with a willing-to-work-but-not-seeking aggregate totaling only 3.1 percent of the extended labor force. That compares with 15 percent of Italians, as shown in the following chart, which covers the first three months of 2015.

The main reason pushing up the Italian number seems to be discouragement: After seeking and not finding work, many Italians lose hope of securing a decent occupation and retreat toward family tasks or activities in the informal economy. Italy surpasses formerly communist Bulgaria in this discouragement tendency, while Danes are the least discouraged based on numbers for 2014, the most recent figures available for this category.

“I got tired of looking for work and started turning to volunteer activities and politics with the Five Star Movement in the town where I live,” said Lavinia Montanini, who tried in vain to get a job in the arts preservation area. “At the same time, since I didn’t find a job, I decided to enroll again at university for an advanced degree.” Some potential employers may have seen her as being overqualified. 

Montanini, of Sorano in Tuscany in central Italy, says she hasn't seen any improvement from Prime Minister Matteo Renzi’s labor market reform plans, while seasonal tourism and farm jobs have picked up.

“The problem is that without work you stop living, you can’t start a family, you can’t have kids,” said the 31-year-old university graduate.

In Italy, more than 60 percent of the willing-to-work-but-not-seeking are women, while the country had the second-lowest female employment rate in the EU last year, after Greece.

Italy's unemployment rate stood at 12.4 percent in May, and reached a record-high 13 percent in November.