Unseen Labor: The Economic Impact of Irregular Work in Italy and the Need for Regulation

It is estimated that the annual turnover attributable to irregular work in Italy amounts to 68 billion euros. Nearly 35% of this added value produced by the underground economy can be traced back to the South, as highlighted in a study conducted by the Cgia Research Office. However, the phenomenon of irregular work has now extended beyond the South and into other regions of Italy, including the Centre-North.

In fact, housekeepers and carers are among those most affected by undeclared work in the Centre-North region, with an irregularity rate of 42.6%. Other sectors such as agriculture and construction have also been impacted by undeclared work, with rates of 16.8% and 13.3%, respectively. In terms of added value distribution in 2021, the South accounted for 23.7 billion euros, while the Northwest had a total of 17.3 billion euros, followed closely behind by the Center with 14.5 billion euros and Northeast with 12.4 billion euros.

When it comes to distribution across regions, Italy has a high number of irregular workers in all areas except for some remote areas with low population density where there is less economic activity or fewer job opportunities available to people from outside their local communities. The sectors most affected by undeclared work include personal services, agriculture, construction, and commerce/transportation/hospitality industries with varying rates of irregularity across different regions and countries.

The economic crisis caused by COVID-19 has exacerbated problems related to forced labor and exploitation of vulnerable workers in some areas of Italy due to increased control by criminal organizations. Gangmastering practices particularly affect agriculture production where immigrants, women and poor people are exploited for long hours at low wages under harsh working conditions.

According to Cgia reports, illegal labor practices have become more widespread posing risks not only to workers but also workplace safety standards.

Therefore it’s important that policymakers take action to address these issues through regulations that protect workers’ rights and ensure they receive fair wages while reducing opportunities for criminal organizations to exploit them further.