Italy has the lowest employment rate of the big western European countries: 58% of the working-age population is in work, compared to 72% in Britain. According to the Economist Italy would need another five million jobs just to match Britain’s employment rate, but Italian industry is being undercut in the global market by manufacturers in lower-wage economies such as China. The proportion of workers in the black economy has risen from 12.9% in 2004 to 14.2% in 2005.
In the five years of Berlusconi’s government, the rich in Italy got richer and the poor poorer. While the income of the self-employed rose by 10.1% between 2000 and 2004, that of employees rose by just 1.6%. The richest 5% of the population have increased their share of the national wealth, up from 27% in 1995 to 32% in 2004. Meanwhile, for everyone else, wages have failed miserably to keep pace with prices. In 2002-03, 50% of Italians reported that they didn’t earn enough to have a decent standard of living; by 2004-05 that figure was 70%. Anecdotal evidence suggests more and more people are resorting to credit cards and HP to stay afloat.
It is estimated that tax evasion has risen from 140 billion euros in 2001 to 248 billion euros in 2005. Much of the rise is thought to result from price increases following the introduction of the euro: the difference between the old prices and new prices has disappeared under the counter and the extra income doesn’t appear in company accounts. To give you an idea of the impact that has on public services, 248 billion euros is twice the entire annual budget of the British National Health Service.