World News

06.07.14

Italy’s Lost Generation: Youth Unemployment Hits Nearly 50 Percent

Nine years ago, making 1,000 euro a month was a nightmare for overqualified 30-somethings. Now, with youth unemployment at 46 percent, it’s a dream for many, and the future looks dim.

In December 2005, a group of underemployed 30-somethings in Italy joined together to form the “thousand-euro generation” club, which later spawned a novel and movie about the plight of overqualified Italians living hand to mouth on just 1,000 euro a month. Nine years later, making 1,000 euro a month has become an aspiration for many.

Nine years ago, with the European economic crisis was still on the horizon, the group’s founder, Antonio Incorvaia, told Newsweek that its aim was to talk about the impending death of the “job for life mentality” and the loosening of labor laws, which would soon make the standard unbreakable work contracts obsolete. As economists across Europe began forewarning the impending crisis, companies tightened their belts and no one dared hire young people, mostly because they couldn’t let their older workers go—either out of duty or obligation. Incorvaia warned that talking “about a situation that the older generation brushes under the table” was imperative for Italians.

Now Incorvaia, who teaches at the European Institute of Design in Milan, is in a new demographic, and the problem he and his contemporaries faced appears to pale in comparison to the current generation of workers between 25 and 34, whose unemployment rate has just topped 46 percent in Italy compared to 13.6 percent for all ages of workers. “It’s been almost nine years since Italy began to take note that there was a ‘thousand-euro generation,’ and in these nine years the situation has worsened considerably,” Incorvaia told The Daily Beast. “The salaries were reduced so much that 1000 euro for many workers has now become a goal or aspiration.”

As the youth unemployment rate steadily dropped, Incorvaia says, the Italian government essentially went into denial about the impending crisis for young people, focusing instead on older workers, who fought hard to keep existing norms in place. Eventually, the labor laws were loosened for new contracts, which meant employers could offer less security for less money for new hires, but in many circumstances, they were tied to high-priced contracts with older workers.

State-sponsored initiatives such as internships and apprenticeships to give young workers on-the-job experience until the older generation retired have largely backfired, as companies tend just to cycle new unpaid or low-paid interns through rather than hiring them once they’ve been trained. “The policy has never been to find a solution, and in some cases it has been blatant denial in the face of factors that created the situation,” Incorvaia says. “In addition, more and more companies take advantage of the system of internships to get workers at a very low cost even though they require the competency and responsibilities of senior professionals. Then even those who have acquired significant expertise are replaced and overridden by those who have none.”

“The consequence of all this is that young people have lost faith not only in the institutions, but also in the value of education. They are prisoners of not knowing what to want.”

Italy’s new—and, more important—young prime minister Matteo Renzi, 39, has promised to institute a jobs act that would make minimum contracts longer and get rid of a number of loopholes that allow businesses to avoid paying benefits to young workers by giving them what qualify as part-time jobs. “The unemployment rate is terrifying,” Renzi said when the recent statistics were released.

But some economists have been highly critical of the jobs act. In La Repubblica’s Micromega economics insert, Italian economist Paolo Pini writes that he is sick of lawmakers who “sell us their recipe like ticket touts, making us believe that with a little more flexibility and the simplification of the rules, companies will again begin to hire.” He adds, “The risk is rather that after the decline, these gentlemen will lead us straight into the abyss. We are at the threshold of a decade of ‘zero’ productivity growth, another step and we’ll have to inaugurate the phase of ‘below zero’ in productivity. The productivity ‘ice age,’ we’ll have to call it.”

Still, the social costs of rising unemployment are hard to ignore. The byproducts of a non-working generation have been especially profound in southern Italy, where youth unemployment tops 60 percent and where university attendance and birth rate also are plummeting. In 2013, Italy’s already low birthrate broke the 1995 record with 12,000 fewer babies born across the country, according to Italy’s national statistics agency, ISTAT. Italy’s population continues to be one of the oldest anywhere in the world, with 151.4 over 65s for every 100 under 15s.

Fewer Italians across the country are attending university, and an increasing number of those who do, according to ISTAT, are dropping out. In 2012-13 academic year, 56 of every 100 university students finished their degree. “The consequence of all this is that young people have lost faith not only in the institutions, but also in the value of education,” says Incorvaia. “They are prisoners of not knowing what to want. And tomorrow, when it will be up to them to support the country, they will be unprepared.”

F.B., a 29-year-old quadruple-language law school graduate who asked that her full name not be published because she has more than 200 résumés out and doesn’t want to be labeled as a “complainer,” told The Daily Beast she believes that the youth unemployment crisis was brought about by panic. “Fundamentally, the media talks about the crisis and people get nervous,” she says. “They want to save their money and not risk investing in people without work experience, so we are left out.” She has completed three legal internships, but each time the law firms found new interns rather than hiring her because they couldn’t afford to pay her. She says she feels her only option is to leave the country and find work, but she would prefer to stay in Italy: “My only choice is to leave, which wouldn’t be my first choice,” she says.

The solution won’t come easy. On Friday, thousands of city workers took to the streets of Rome to protest further talk of austerity measures to try to get the city of Rome to live within a manageable budget. The proposed cuts would reduce paychecks of 24,000 city workers with full-time contracts by 200 euro a month. The cuts are aimed at stimulating growth and creating new jobs, but as has been typical in Italy, those with jobs are not willing to help those without. “The reforms that were presented will not improve quality of services, they are not innovative, and they will only rob part of the wages from workers,” said Natale di Cola, labor union secretary of Italy’s CGIL, at the protest.

For now, the future looks dim for an increasingly large number of young Italians. “At the moment there does not seem to be any sign of recovery, neither economic nor cultural nor social,” Incorvaia told The Daily Beast. “I believe that more and more people will try to be self-employed or opt for startups to try to achieve what companies and agencies are no longer able to offer, even though they often make the mistake that a good idea is enough to become the new Mark Zuckerberg.”

More and more people, Incorvaia believes, resign themselves just to “settling for what happens,” in part, he says, “because the media never promote positive role models and examples, but rather amplify the level of alarm and a sense of helplessness.”

In the meantime, the new “thousand-euro generation” will have to figure out how to fit into an ever-changing labor market, just as Incorvaia and his contemporaries did almost a decade ago. “I think that those who, in a time like this, are able to offer the market determination and ambition can really make a difference,” he says. “Growth and development are not what’s lacking; the rules to be part of it all have simply changed.”