Share

Undeclared work is 15,9% of employment: why can't it be eradicated?

Istat, while noting a partial reduction in undeclared work, maintains that "the recourse to irregular work by businesses and households is a structural feature of the Italian labor market" but this invalidates or not the official statistics on employment, unemployment , inactivity, pay and income?

It's true, the Work unit (or Full-time equivalent work unit – AWU) serve to measure in a homogeneous way the volume of work performed by all those who, regardless of their residence, contribute to the production activities carried out on the economic territory of a country. AWUs represent all job positions (main or secondary) carried out by employees, transformed into equivalent full-time units; Like this, they are calculated as the ratio between the total hours actually worked and the average number of hours worked full-time.

Then, it would not be correct - as some commentators have done - to confuse the number of AWUs with that of natural persons, whether employed or unemployed. It is in this key that the ISTAT Report of 11 October dedicated to the "unobserved" economy, in practice to undeclared work, in the time frame 2012-2015 should be read with concern. In 2015, there were 3 irregular work units, mainly employees (724), up on the previous year (respectively +2 and +651 units). The irregularity rate, calculated as the incidence of irregular work units (AWU) on the total, was 15,9% (+0,2 percentage points compared to 2014). The irregularity rate in employment was particularly high in the Personal Services sector (47,6% in 2015, 0,2 percentage points more than in 2014) but was also very significant in the Agriculture sectors (17,9%) , Construction (16,9%) and Commerce, transport, accommodation and catering (16,7%).

The question should also be examined in relation to the labor policies adopted in those years, both as regards the supervision and sanctions against irregularities and the promotional policies of "good employment". It is therefore important to note that in 2015 the added value generated by the unobserved economy, i.e. by the sum of the shadow economy and illegal activities, amounted to just under 208 billion euros, with an incidence on GDP equal to 12,6, 2014%. Compared to 5, both the amount (about 0,5 billion) and the incidence on the total economic activity (-XNUMX percentage points) decreased.

The dynamics of the last year considered therefore marks a trend reversal compared to the trend of the phenomenon in the previous three-year period which had recorded an upward trend in the three-year period 2012-2014 (when it had increased from 12,7% to 13,1%). Which could make the contribution of the tax reduction for a three-year period considered important, included in the budget law for 2015 and the changes to the discipline of withdrawal according to the provisions of the jobs act, as well as the success in the use of vouchers (in this regard, we will see the effects of the recent punitive measures which have reduced, rendered useless and difficult to use this institute, in its new version).

Also in 2015, the added value attributable to the unobserved economy amounted to 14,0% of the total amount of GDP, down by 0,6 percentage points compared to 2014: the component linked to the underground economy accounted for 12,8. 13,4% (against 1,2%), while the incidence of illegal activities included in the estimate (drug trafficking, prostitution services and tobacco smuggling) was stable at XNUMX%. The composition of the unobserved economy showed a significant change from previous years: the most relevant components remained the aspect of the sub-declaration and the added value linked to the use of irregular work, which represented, respectively, 2015% and 44,9% of total unobserved economic activity in 37,3: the weight of the former decreased by 2 percentage points and that of the latter increased by 0,8 points. The incidence of the other components (tips, undeclared rents and supply-demand integration) and of illegal activities was less significant but increasing: the first rose to 9,6% (with an increase of one percentage point) and the second all 8,2%, 2 tenths of a point more than in 2014.

So far, the most significant data of the Report, the deepening of which will provide a more complete picture. To want to be "politically incorrect" a consideration and a question become inevitable. Starting with the first, it would not be "correct" to deny that the combination of tax relief and contracts with increasing protections (the first was certainly more decisive than the second) has provided a substantial contribution (we will see later whether it is exhausted or not due to the new provisions). The question is: but if the weight of work in the underground (“unobserved”) economy is so significant, do the official statistics on employment, unemployment, inactivity, wages and incomes make complete sense? If – as ISTAT writes – “The recourse to irregular work by businesses and households is a structural feature of the Italian labor market” it will be necessary to ask the question of why this phenomenon occurs and it is not possible, at least, to scale back. Since the anthropological interpretations would not be exhaustive, it will be good to be satisfied with finding those of an economic and social nature.

comments