The Alarming Growth of Italy’s Underground Economy: Illegal Activities and Unobserved Work on the Rise

Of course centre-right friend of tax evaders and crafty tax cheats. Not even the two governments Conte e Draghi have succeeded in reducing the endemic plague of the unobserved economy, composed of Work nero and various illegal activities. According to the latest report, relating to 2021, released yesterday by Istat, around 73 thousand more individuals work illegally in the Bel Paese compared to the previous year. Specifically, compared to 2020, the component of non-regular employee work grew by 1.5% (+33.2 thousand units) while that of independent work grew by 5.1% (+39.3 thousand units). Dramatically approaching the threshold of 3 million people who represent the category of workers most exposed in terms of poor wages, accidents and unrelated deaths. Then on the front of illegal activities which have exceeded 18 billion euros and which include data on drug and narcotic consumption and spending on prostitutes which, two years ago, was worth a good 4.5 billion.

BELOW PRE COVID LEVEL
Analyzing in detail the tables with the consequences of recent years, it emerges that the “unobserved” economy in 2021 grew by 10% compared to 2020 – a completely exceptional year and with which no comparisons of any kind can be made since the The pandemic has eliminated every type of activity, including illicit ones. With the recovery, however, the underground economy and illegal activities have obviously restarted and grown, but at a rate higher than that of the GDP: they are thus worth 192 billion euros (they were 174.6 billion in 2020, ed.), a level «unworthy of a civilized country”, as the National Consumers Union (UNC) defined it yesterday.

Beyond the relationship with GDP, in 2018 and 2019 the absolute values ​​were lower than in 2021: they respectively reached 188.9 billion in 2018 and 183.8 billion the following year. The GDP, then, in mid-2022 exceeded the 2019 level and, at this point, we will have to wait for the next report on the underground economy in Italy to understand how the trend of the “black” sector and illicit and criminal activities is moving or whether their impact is continuing to reduce. But it is quite probable that the trend will not change, demonstrating the ineffectiveness of the policies implemented so far. For now the Istat bulletin holds no surprises. The incidence of irregular workers in domestic work and other personal services exceeds 40% of the total, in particular in construction and agriculture it exceeds 18%, while it stands at around 13% for trade, transport , accommodation and catering.

UNDECLARED INCOME
In 2021, the total underground economy is worth 173.9 billion euros, an increase of 16.5 billion compared to 2020. However, its impact on GDP remains stable at 9.5%. The component linked to under-declaration – i.e. income not declared to the tax authorities by companies: here the estimate is stuck at 5% of GDP, as two years before – is worth 91.4 billion euros while that connected to the use of irregular labor it stands at 68.1 billion (they were, respectively, 79.7 and 62.4 billion the previous year).

Finally, a separate discussion concerns the illegal economy which, as mentioned, exceeds 18 billion between activities prohibited by law and those which would be legal but are carried out by unauthorized operators. The bulk of this item is represented by drug trafficking, whose added value rose to 13.7 billion euros from 13.3 in 2020. In second place is prostitution (+11.8%). In this field, a study by Codacons, also cited by Istat, estimates 3 million clients of prostitutes in Italy and over 90 thousand women permanently engaged in the sector.

2023-10-14 23:50:00
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