Italy is known around the world for being one of the most beautiful countries with an exceptionally high standard of living, superb food and close knit communities. So it might come as a major surprise to find out that many young Italians are leaving the country – and not just leaving, they’re leaving in large numbers.
This has left rural towns and villages with shortages of labor and not enough educated people to work in healthcare, teaching and even the corporate sector. These problems are compounded by the fact that Italy already has an aging population who place high demands on social resources.
Since 2008, more than 2 million young Italians have left the country to find work and opportunities abroad. This is a trend that is not slowing down and according to most government research the trend is expected to increase in the coming decades.
The problems confronting Italy will become obvious to most Americans once we live in Italy for more than a couple of months. Italy is a great country for a vacation. It is a great country for retirees (there are tax abatements, but taxes on retirement income can be high). But would you want to leave your job in the United States and try to make a living in Italy? Absolutely not. The bad news for the United States is that there is growing support domestically for policies that are similar to the polices that got many European countries including Italy into trouble in the first place.
A Lack of Jobs in Italy – The Statistics Tell a Worrying Story.
For young people growing up in Italy there are limited career opportunities and an extremely high rate of unemployment. This means that many ambitious young Italians are forced to leave the country to find employment elsewhere in the European Union or in America.
Officially, according to the Italian government’s Labor Statistics, the overall unemployment rate is almost 4% although the youth unemployment rate is double that, at 8%. This might not sound too bad but it does represent nearly 1 in 10 young Italians who can’t find work!
However, when we take a closer look at the figures the picture is more worrying. For young people under the age of 25 who are looking for work nearly 30% cannot find a job! This is a terrible prospect for Italy’s younger generations and it’s a situation which doesn’t appear to be improving.
When the local unemployment rates are compared to other parts of the European Union the differences are massive. As an Italian citizen you have the right to live and work anywhere in the EU and so many younger people take advantage of this to resettle in other parts of the continent.
This is particularly difficult for Italians because traditionally they usually prefer to stay close to their homes and families. Moving overseas to find work is challenging for these social reasons but even so, many young Italians are taking matters into their own hands and finding work in other parts of the world. This leaves half empty ghost towns and villages in the rural parts of the country and communities that are struggling to make ends meet.
Italy is Not Meritocratic.
One of the foundational principles of most Western societies is the concept of meritocracy. This is the basis of the American Dream and states that if you work hard you can succeed, no matter where you come from or who your family is.
Life in Italy though is a little different! Italy is a highly nepotistic society which is to say that many people secure their jobs through family connections instead of top grades at university!
This can be extremely difficult to overcome, particularly in the top jobs. Many young Italians who are ambitious but don’t have the right connections simply leave the country to find other places where they can rely on their own hard work and qualifications to make their way in the world.
Tax Rates are Very High in Italy.
As well as a lack of job opportunities in Italy the tax rates are also very high. This creates another incentive for young Italians to leave the country and find work elsewhere. Compared to other Western countries, including America, the rates of taxation of your income is pretty high in Italy!
Tax rates in Italy operate on a progressively sliding scale which means that the more you earn the more tax you will be paying as a percentage! This can act as a major disincentive for the younger generations who want to work hard but keep their own money in their pocket! Summary of
Taxes in Italy are as follows: 23% for amounts up to EUR 15,000, 27% for amounts between EUR 15,001 to EUR 28,000, 38% for amounts between EUR 38,000 and EUR 55,000 and 41% for amounts between EUR 55,000 to EUR 75,000 and 43% for EUR 75,000 and over.
On top of the basic rates of tax Italians also have to pay additional local taxes, levied by their local authorities. These vary widely from region to region by in general represent approximately an extra 1 to 2% annually.
For the Italian government the situation is creating a vicious cycle! As more people leave the country to find work elsewhere the government is forced to raise taxes to cover their losses in revenue! This drives more people to leave the country and so the taxes are increased again. This weakens the Italian economy but is also one of the reasons why the country is so welcoming to Expats who move to the country with skills and higher educational qualifications and ability to pay taxes.
Italian Bureaucracy – World Famous!
The world famous Italian bureaucracy is well known for being nepotistic, corrupt and extremely complex. This makes life more difficult for young Italians who might want to set up a business or even find work!
On top of this, arduous local regulations have been putting a damper on innovation and entrepreneurship – quite unlike anything you’d expect to find in a modern, highly developed Western nation.
There are many historical and cultural reasons for the growth of this bureaucratic system but when you add the endless regulations of the European Union this problem is only compounded further.
Low Levels of Research and Development.
Never before has the value of research and development been greater in order to maintain a thriving economy in the competitive world markets. Super powers such as America, China and Russia spend astronomical amounts of money on a vast array of research and development projects in every field of commerce, healthcare and electronics. This has led to unprecedented growth in these industries but it also means that any country which doesn’t keep up will be left behind.
Unfortunately, Italy has been falling behind much of the rest of the developed world in the field of research and development which has led to a stagnating economy and a lack of opportunities for their youth.
For Expats moving to Italy there is an opportunity to make a real difference to the future of the country by setting up research and development projects and although it might be difficult to get grants or funding from the Italian government the EU has been more supportive over recent years.
High Levels of Unskilled Immigration.
In the last few decades Italy has seen very high levels of unskilled immigration – as has much of the European Union. There are many advantages of immigration but unlike countries such as America, there is no emphasis put on the types of skills that the new arrivals have. In the USA, immigrants who are highly skilled are welcomed into the country while the process of relocating for low skilled workers is more difficult. This means that the highly skilled immigrants create opportunities in the country that benefit the entire society. However, it has to be noted that non-citizens are beginning to have a significant impact on the American welfare system. Roughly 63% of non-citizen households access welfare programs compared to only 35% of citizen households.
Conversely, in Italy, many of the unskilled immigrants do not speak Italian and end up living on the already overburdened social security system – which is very generous compared to other countries around the world. It’s widely thought among the population that the welfare system in Italy is broken and the large numbers of immigrants are putting further strain on it.
The high levels of unskilled immigrants entering the country have increased the competition for low skilled jobs which traditionally have been done by Italy’s youth. Work in hospitality, factories and other traditional sources of income for the younger generations have been drying up as a result.
The high levels of immigration has led to economic ramifications for the government and the nation however it has also created social and political problems. These concerns and the issues that have arisen around the problems have led many young Italians to leave their homeland in despair at what they see to be a failing system.
The Italian Education System is Often Blamed.
Many Italians blame the education system for the suffering economy and poor prospects for the young. Many young Italians feel that they were given bad information when they first left school which led them to study courses and subjects with no good career prospects. Large numbers of Italians study the humanities at university which have very poor job opportunities afterwards!
Too few Italians are studying the STEM field subjects and this is largely because the career advice for students at school is either non existent or, in some cases, inaccurate. The lack of apprenticeships and ‘school to work’ schemes is another limiting factor for the younger generations and where they do exist they are chronically underfunded. An amazing 65% of Italians between the ages of 18 to 34 still live with their parents compared to only 30% in the USA; and this is partly due to the lack of educational and personal development opportunities in the country.
But What About Expats And Immigrants?
Despite the fact that Italy’s younger generations have many good reasons to consider moving overseas in search of career opportunities their homeland remains a fantastic destination for relocating Expats.
The stagnating economy has kept the costs of living low compared to most of the rest of Europe and the developed world. This means that Expats can buy properties at very competitive prices and if they bring valuable skill sets with them they can be sure to find a satisfying job. Expats are much needed in the country to fill many of the vacancies that have been left as Italians leave but you can also work remotely while you establish yourself.
It is hoped that in time the situation in Italy, in terms of education, job prospects and high taxes, for the young Italians who are currently leaving will improve; and although this may take some time, eventually the pressure to make the necessary reforms will reach the point that the government will be forced to act.
What do you think is the biggest issue facing Italy?