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Why Italy is in a Slump

14 Dec


Photo I took last night at my local supermarket. Shortage of perishable goods due to this week’s trucker strike.

I know I said I’d get off the ‘problems in Italy’ track for a bit, but I find this very timely so I wanted to share it. Even the New York Times has noticed that we are feeling the pain over here. A reader sent me a link to this article by Ian Fisher, and I found it to be an excellent analysis of the current, sad state of affairs here in Italy as it relates to business, economy, and general quality of life. An excerpt:

“It’s a sadness that what could be isn’t — that we are not a normal country,” said Gianluca Gamboni, 36, a financial adviser in Rome, summing up how he feels about Italy, which he loves, but which drives him insane.

Unlike the older generation, he travels and sees how much better things work elsewhere. He does not spare himself: he still lives with his parents, not because he wants to, but because only now, after seven years at his job, can he afford Rome’s high rents. He is finally considering a place of his own.

The statistics in this article are interesting as well. For example, the article states that “70 percent of Italians between 20 and 30 still live at home.” When I first moved here I thought it was a cultural phenomenon due to some kind of attitude of laziness, but since I’ve lived here I’ve found that it usually has to do with the same problem that Gianluca, quoted above, has—they simply can’t afford to move out, and it’s not only for the exorbitantly high rents in cities like Rome.

Here’s an example. I’ve been told that the average age of a graduate of La Sapienza University law school is 30 years old. The age a person graduates depends a lot on them, how they’ve stayed “on track”, since it’s totally up to each individual student to take the requisite number of exams to pass each subject required for the degree. They take the exams when they personally feel ready and when the exams are offered, and the profs (at least in the law school) are notorious for being totally unpredictable and subjective in how they grade the exams, all of which are oral interviews usually based on snippets of facts from books assigned on the course.

After graduation, he or she must then serve a two-year apprenticeship with a laywer which is usually unpaid and during which time they aren’t able to start their own law practice or build up their own client base. The Italian education system is so incredibly theory-based that apparently this is supposed to compensate for the fact that when Italian law students graduate, they often have never stepped into a courtroom before and would have no idea what to do in terms of the daily errands and tasks a lawyer might need to complete inside the courtroom’s various offices. Unfortunately, the apprenticeship is usually little more than a glorified secretarial/gofer position and although the law graduates are required to attend a certain number of hearings over a two-year period in order to qualify to take the bar exam, often the lawyers they apprentice with take advantage of the free labor and don’t cultivate a mentor/mentee relationship.

The bar exam is held only once a year and consists of a written and oral exam, spread months apart and graded independently (one must first pass the written to be later admitted to the oral). Both parts of the exam are graded/judged by commissions, usually with an extremely low passage rate across the board, which can further delay entry into the career field by a year or two.

Once a law graduate finally has a license to practice, he or she then must spend a few years finding clients and building up their own business, since it’s highly uncommon to enter a law firm as very few big firms really exist. Given the long lag time of the Italian justice system, the first years of work probably won’t bring any worthwhile dividends until the 3rd or 4th year. Those who do go to work for a lawyer with a large practice report being hideously underpaid (something around the equivalent of $5 an hour in some cases), with no real chance for advancement, unless they decide to open their own practice, at which point they’d have to start from square one because they wouldn’t be able to take clients with them, since those are clients of the lawyer whose firm they worked for. With over 16,000 lawyers in Rome, competition is fierce, and when the economy is bad, there is less work to go around.

When all is said and done, six, seven, or more years have easily passed since graduation and one can easily be well into their 30s with still little hope for financial independence or security. This is just one example of the extended adolescence that the “system” seems to promote.

I was surprised that the article didn’t touch too much on “raccommandazioni” or the “who you know” factor that is truly all-important (at least here in Rome), especially in terms of getting a job. People who don’t want to go through the work and struggle of setting up a freelance practice are often lured into the idea of getting “sistemati” (squared away?) in a government job, where they feel the security of guaranteed pay and no possibility of being fired. The problem is that most of these jobs go to people with connections, even though technically most of the positions are assigned through public exams, the exams are often just a thin veil for hiring the “raccommandati.” Until you can find someone who can get you an “in”, you may be on a fruitless job search. The job market here, at least for public sector jobs, is highly inflexible and very immobile.

In the video that accompanies the article, Italian pop-culture author and humorist Beppe Severgnini says that in order for change to happen, each Italian needs to start taking personal responsibility for his behavior, specifically citing “pay your taxes” or “don’t ask for favors when you’re looking for a job.” (It’s probably easy for him to say this: Severgnini comes from a wealthy notary family—notaries are the highest-paid professionals in Italy, often earning six or seven figure annual salaries—and Severgnini himself is no doubt quite well-off as well, given his job writing a popular newspaper column and the enormous success of his various humor books.) Granted, I’m not an Italian but a foreign observer; however, I find his observations to be a bit simplistic and idealistic. In my chats with Italians, I’ve been told that if they paid all the taxes levied on them, they wouldn’t have enough money to live off of. Many freelance professionals and business owners report less income in order to avoid increasing their income taxes, which can hover around 60-65%. I’ve heard many Italians say they would be more than willing to be 100% honest if they felt that the system supported them and that they were getting some value for the high level of taxes they were paying. But other Italians just shrug and say that taking advantage of the system is part of the Italian mentality.

Personally, rather than espousing a blanket statement like “play nice” such as Severgnini seems to be saying, I would tend to side with the Italian who feels betrayed by an incompentent and corrupt government and therefore tries to take whatever small advantages he can from the system. Severgnini seems to be saying that Italians like to take the easy road of blaming the government for their problems, but truly, when the government sets a blatantly corrupt and inefficient example for the entire country, using the system to their personal advantage while neglecting the day-to-day management of the business at hand and neglecting to solve the real problems that exist… it’s quite hypocritical to expect citizens to be honest just for the sake of being honest.

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18 Responses to “Why Italy is in a Slump”

  1. jessica in rome December 14, 2007 at 10:57 am #

    It is definitely a sad, and frustrating system/cycle. Daniele faces the same B.S. in the military. Where those with lower rank and less qualifications get advanced much faster and into much better positions (like NATO bases) simply because the officer in charge is best friends with their dad. The taxes are mad crazy. You’re right, D is taxed 65%. The other day we went to a get blood tests and he had to pay 80 euro with coverage and me, without, had to pay 110. WHAT? So where is the money going? Granted the health system is pretty good, but still. When over half of your paycheck is going to the government, it would be nice to reap the benefits. Instead it makes you wonder who’s pocket it is going into. I used to make fun of Italian mamma’s boys before I knew better, now I feel sorry that they are the victims of an inefficient system.

  2. kataroma December 14, 2007 at 11:16 am #

    I worked at an Italian law firm for a time until I gave up the law altogether (it paid too little!) One thing I’d add is that the system you’ve described (and you’re spot on) means that professions such as the law (as well as accounting, notaries, medicine etc.) are closed to all but the pretty wealthy. Who else can afford to support their “children” until they are almost 40? Part time/summer student jobs are unheard of here and student loans don’t exist. So mummy and daddy are the only source of support.

    All lawyers just about (and other professionals) are of upper middle class/upper class background and many of them are, in fact, the children of lawyers (surprise, surprise!) If you’re the kid of lawyer everything is easy: you get made a partner at dad’s firm and dad mentors you (and makes sure you have a roof over your head) during your two year “practica.”

    At any rate, I’ve found that most lawyers here in their 30s either live with their parents or their parents are wealthy and bought them a flat/pay their rent. This system of patronage and ridiculously long apprenticeship thus effectively bars working class but bright kids (especially those from smaller towns) from entering the professions (if they manage to go to university at all which is also virtually impossible since student loans/grants don’t exist and jobs are hard to come by.)

    The sad thing for Italy is that working class bright kids are completely barred from entering the elite. Not only are there no Googles here, but there are also no Bill Clintons.

    Can you imagine the brilliant son of a single mother and an alcoholic getting into the equivalent of Yale law school here and then becoming governor of his home state at age 32?

  3. s c tan December 14, 2007 at 12:41 pm #

    great blog!

  4. sognatrice December 14, 2007 at 12:49 pm #

    I completely agree with you that reform and change needs to start from the government and work down. This was being discussed on another blog, Italian Trivia, in which Jennifer, the author of the blog, wrote “Quit cheating and pay your freaking taxes people!” This was my comment there:

    “Sounds simple enough, but I don’t think it is–chicken and egg thing I’m afraid.

    I can’t see how you’ll convince a lot of southerners, in particular, to pay taxes on what little income they bring in when, for instance, Calabria just shut down non-emergency hospital care b/c of corruption in the regional health care system (spurred by the recent deaths of 3 children after routine procedures):

    Il Dramma delle ASL calabresi

    Down here, people see *nothing* being done with state money, so I think it would be hard to convince them that if they only gave more (and perhaps ate less) things would be better.

    Personally, I think it has to start with the government and work its way down. There *is* money there–they just step all over themselves to grab it for themselves and their amici instead of using it for what it should be used for. The people in charge need to make the people trust them first; without that, there’s no way things are going to change.”

    I should also add that plenty of people down here do pay taxes, and I believe there were some statistics somewhere that said proportionate to income, the south pays more? Don’t quote me on that; it was just something I read in passing and never investigated fully.

    Anyway, FWIW, American law schools are largely still theory-based (especially the top tier schools) and only in the last 10-20 years or so have clinics and other such hands-on, practical experience becoming commonplace–indeed, this is how some of the lesser-known, lesser-endowed schools are drawing students in now.

    No reason Italy can’t start doing that too…other than, you know, resistance to change 😉

  5. Jeff December 14, 2007 at 2:22 pm #

    Shelley,
    I get so frustrated at this “pay your taxes” because my company reports my earnings to Italy so I have no choice. The governement takes out their big chunk and I don’t have a thing to say.
    Maybe I’m just jealous because I shop at all these small stores and they are good people but they don’t report nearly all the money that comes in (i.e. I don’t always get a reciept). They complain about the government but they pay nearly what their supposed to. Almost EVERY day in the news here the GdiF finds people in nero or companies that have scammed the governement for years. UGGHH…

    Jeff

  6. nyc/caribbean ragazza December 14, 2007 at 3:03 pm #

    Hopefully the changes/goverment reforms will help make a difference. When Ale explained to me how the current system works, it’s clear there needs to be a major change.

    The problem is those in power never what to give it up (it doesn’t matter what country your in). However, these are different times. The article did mention how cheap imports are impacting many of the family owned businesses who cannot compete. Hell, even Prada and Armani are thinking about outsourcing more manufacturing overseas.

    I try to buy made in the USA but everything is made in China it seems except for some high end things from Italy, France and Brazil. I assume for a smaller country like Italy this trend along with a brain drain will spell disaster for the economy unless the govt. gets it together and fast.

    There needs to be a balance bet. employees having a job for life or the opposite extreme of firing whoever/whenever to keep your profit margins up.

    I agree with Shelley yes individuals need to step but it’s hard to do that when you have no faith in your gov’t. There are smart entrepeneurs in Italy but they can’t do it by themselves. The Euro being very strong is also hurting economies across Europe as it make their exports very expenisive.

    It’s funny Time magazine just did an article saying France is a wilting power in the wider world. How few of their best sellers make it to the U.S. few of their films. etc., and they are depressed.

    My Italians friends do love their country, know it has many problems but they haven’t thrown up their hands and given up. Many of them have lived in the U.S. or the U.K. and came back. They have friends all over the world and know things can change and must. Italy has been through a lot during their long history and will bounce back. I get that the election laws post WWII were created in order to prevent another dictator but this constant flux is not good at all.

    Personally I have been a funk since September 11, 2001. 😦

  7. Janie December 14, 2007 at 4:41 pm #

    Great synopsis of what really goes on. We recently discussed this in my Italian class (teacher is from Rome and another student is from Naples). When I tell them they that I want to live in Italy for a while , they can’t understand it. They both express how lucky they feel to be in the US where anyone can do anything and how much easier it is to get a job. Although they miss their home country, neither would give up their careers here to move back.

  8. Clodia December 14, 2007 at 8:40 pm #

    Nice blog, but I like this answer to the NY Times better: http://tinyurl.com/2w2bm8 – That’s a real Italian talking.

  9. Katie December 14, 2007 at 10:56 pm #

    Wow! This is truly an interesting perspective on being a lawyer in Italy as well as the impact of the strike . As a tourist one has a tendency to barely see the reality as one is so often caught up in the moment of being “there.”

    Thans for sharing!

  10. anna l'americana December 15, 2007 at 5:36 am #

    It is truly frustrating. We think putting up with a few scioperi or suzy-bake ovens or lack of postal service is bad….Imagine a life doomed to living with your parents and never finding advancement…While you guys are living there pretty much as Italians, we as Americans always have the knowledge that there is something ahead for us (whether there really is or not). To be able to live life as lustily as they do with nowhere to go….Now THAT is character.
    Also: I think this plays a big part in the divergent mentalities. The American mentality/behavior as a result of this difference is partially why they think we’re nuts.

  11. anna l'americana December 15, 2007 at 5:37 am #

    Fatalism vs. optimism

  12. Shelley, At Home in Rome December 15, 2007 at 12:09 pm #

    Thank you all for your comments and thoughts!

    Kataroma: While I don’t think that a low-income family could necessarily afford to support a law student or medical student through their long apprenticeship, etc., I don’t tend to agree that most of these students are wealthy. Or, maybe it depends how one defines wealthy. What I’ve found is that many Italians think that property is one of the only secure investments, and so they plan way ahead (some as early as when children are born) for their future housing… many who are lawyers and don’t live at home for a long time have inherited property or been “given” a home by their parents… it seems to be a sort of tradition, although I wouldn’t feel confident enough to say across the board, but the people I know in this position are solidly middle class but have just kept property in the family. I’d say about 60% of my Italian friends are young lawyers and I wouldn’t consider any of them wealthy, and none of them are children of lawyers. Not to say that what you have observed isn’t correct–I have no doubt about your experience here! But I have seen a balance of solidly middle class students as lawyers as well.

    Clodia: I find that response incredibly sad. Do you see any hope in that kind of a response? What kind of life is “managing”? In fact, I think that is the exact reason WHY people who live here, both native Italian and non-native residents who have made Italy their home, are so incredibly frustrated.

  13. kataroma December 15, 2007 at 12:25 pm #

    Shelley – what I meant was that 100% of the lawyers I’ve met here are middle class to wealthy – the middle class ones seem to live with their parents well into their 30s – the more well off ones have parents who buy an apartment for them. I’m from a middle class background myself (dad is a retired professor from the City College of NY and mum is similar) and I know I’m the kind of person who would be able to go to uni here.
    In fact, I’d probably still be living with my parents if I were Italian!

    On the other hand, I’ve never met a working class Italian – especially one from a smaller town- who has managed to make it into a profession or even to university. This is a huge waste of talent IMO. Contrast that with my Dutch boyfriend who is a working class guy from a small village. Because he was bright, he was encouraged to go to university and a system was in place where that was possible. I know similar people in the US – many of them my dad’s former students at City College in fact!

    Here that kind of social mobility is virtually impossible and I’ve read that Italy has one of the lowest rates of social mobility in the world. Either you have a family with money/property who can support you or you don’t – there is no other source of income during your long apprenticeship/adolescence. 😦

    IMO this is bad for Italy and bad for bright young energetic Italians who happen to be working class.

  14. Shelley, At Home in Rome December 15, 2007 at 12:45 pm #

    Kataroma: Thanks for the clarification, I think I misunderstood a bit. I agree that being as my main circle of friends are young lawyers (Ale himself being a lawyer, son of a taxi driver and secretary), I admit that no one in our circle of friends could truly be considered blue collar or working class. I think it’s a shame as well. In fact, although the middle class has it rough as I described the process, I have no doubt that working class students probably have less opportunity for advancement, which of course is a shame because if they wanted to break into a different position perhaps they would be held back by lack of mobility. In that case the only answer might be move abroad, but unless you’re from a middle-class or higher background, who can afford it?

  15. anna l'americana December 15, 2007 at 2:10 pm #

    I thought Ale’s folks were in the restaurant business. I’m curious – what were your FIL’s views on the taxi strike and the issuing of additional permits?
    Oops, off topic again, I apologize! But I do feel these subjects are a bit related if we are discussing the Italian economy and survival and how they cope with it.
    One of my Roman friends is blue collar working class (no high school diploma), his parents barely kept it together and raised 4 kids in a not so nice tiny 2 br 1 ba walkup shotgun apt on the Casilina – NOT the high rent district – Parents are gone now (RIP), but he still lives in that apt which he now owns (I love how you can buy an apartment in a building that is not condo or coop!) and lives in it with wife & 2 kids. They are doing a bit better obviously, though not much – because he works 2 jobs and his wife (whose parents were farmers) is a nurse. Their daughter is now at the university and works somewhere as a commessa to help defray the cost, the son is in liceo. So some upward motion is possible….But I’m betting that the son ends up raising his kids in that very same tiny apartment. The daughter will end up living with her in-laws when the time comes. Things are getting worse even though some things might look better. In the old days (until late 70s), families were mostly single income, wives didn’t work outside the home usually unless helping in the family business (ie: cooking in the family restaurant, running the register in the family bar). Years later, Italians are struggling just as hard financially on 2 incomes (and in this case 3 1/2!) and the family unit is suffering (when I saw those prepared heat-to-eat already sauced pasta CARBONARA in the markets I almost died of shock! – and disgust), and now latchkey kids are being raised in Italy too – and a larger %age of them are growing up to be delinguenti – and so on and so on and so on…
    The cycle continues, it just becomes more complicated to survive.

  16. Clodia December 15, 2007 at 3:00 pm #

    Shelley: Has there ever been a worse time to be alive than now? It’s always a legitimate question, no matter where you live! As we consider all of this — the article, our memories, the creep of nostalgia for anywhere but here and now — we are struck by the certainty that, statistics aside, nobody is unhappier than Americans but — and here’s the problem — more unwilling to admit it.
    Yes, we manage also, here in America. Didn’t you know that?

  17. Maryann December 16, 2007 at 6:06 pm #

    Interesting post. It clarifies the misconception generally held that adult children stay with their parents for an extended amount of time because of the “mama” thing. Unfortunately, things in the US are changing also. As the middle class vitually disappears, our adult children are needing more help as well. Sometimes we can’t give it because the job market for us is limited. It’s retail or the professions. All factories have moved off shore. We look forward to low paying jobs with no security. I could go on and on when I only wanted to say..”well done”.

  18. Elizabeth December 18, 2007 at 1:21 pm #

    When things get depressing here, something happens over there to put it all in perspective. My sister just had an operation in downtown Boston, under the “day hospital” formula with general anesthesia, got out of the operating room about 3:00 and was back on the road by 5:00 to face a three hour trip in a blinding snowstorm in a dazed, drugged blur accompanied by lots of pain (from the extraction of lymph nodes from her groin) with my poor brother-in-law at the wheel. Couldn’t she have stayed the night in the hospital? of course not! Clodia has it right, although even my stoic all-American Dad was ready to admit American’s unhappiness at the cruelty of today’s health system.

    So, while one of my two sons will most likely live at home for university, the other is already up North. Each will do what works best for him and both solutions are fine by us. Then we will see what next. Does keep parents from sleeping at night!

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