Italy at the Grim Edge of a Global Problem (Updated)

By Don Quijones, of Spain & Mexico, editor at Wolf Street. Originally published at Wolf Street

To be young, gifted, educated and Italian is no guarantee of financial security these days. As a new report by the Bruno Visentini Foundation shows, the average 20-year-old will have 18 years to wait before living independently — meaning, among other things, having a home, a steady income, and the ability to support a family. That’s almost twice as long as it took Italians who turned 20 in 2004.

A Worsening Trend

Eurostat statistics in October 2016 showed that less than a third of under-35s in Italy had left their parental home, a figure 20 percentage points lower than the European average. The trend is expected to worsen as the economy continues to struggle. Researchers said that for Italians who turn 20 in 2030, it will take an average of 28 years to be able to live independently. In other words, many of Italy’s children today won’t have “grown up” until they’re nearing their 50s.

That raises an obvious question: if Italy’s future generation of workers are expected to struggle to support themselves and their children until they’re well into their forties, how will they possibly be able to support the burgeoning ranks of baby boomers reaching retirement age (66 years and seven months for men and 65 years and one month for women), let alone service the over €2 trillion of public debt the Italian government has accumulated (and which doesn’t include the untold billions it hopes to splash out on saving the banks)?

The trend could also have major implications for Italy’s huge stock of non-performing loans, which, unless resolved soon, threatens to overwhelm the country’s banking system. If most young Italians are not financially independent, who will buy the foreclosed homes and other properties that will flood the market once the soured loans and mortgages are finally removed from banks’ balance sheets?

As happened in Spain and other crisis-hit countries, global private equity funds will probably pick up much of the slack by buying up huge tranches of foreclosed or unoccupied properties, as well as occupied social housing units, at knock-down prices, but whether they’ll actually be able to rent the properties they buy or unload them at a profit is a whole other matter, what with most young Italians forced (or choosing) to stay at home with their parents.

At the Grim Edge of a Global Problem

Youth unemployment is a global problem that is already having a major impact on societies and their ability to finance their needs. Youth unemployment is a staggering 54% in Southern Africa. In Greece, it’s 46%, in Spain, 42%, in Italy, 40%, and Iran, 30%.

Averaged across OECD countries, 14.6% of all youth (some 40 million people) were so-called NEETs (Not in Education, Employment, or Training) in 2015. In Southern Europe the share was sharply higher, with between one-quarter and one-fifth of all young people out of work and not in education in Greece, Italy, and Spain.

In Italy the main reason why so few young Italians are financially independent is they can’t afford it. Of the 15 western European nations ranked in the 2016 Global 50 Remuneration Planning Report, Italy boasted the lowest average salary for full-time jobs aimed at recent graduates: €27,400 a year. That compares to €83,600 in top-placed Switzerland, €51,400 a year in second-ranked Denmark, and €45,800 a year in Germany and Norway.

Even in Spain, a country that has broken the 20% unemployment barrier three times in the last 30 years and which has been described by one Spanish economics professor as the “worst labor market on Earth,” recent graduates can expect to take home €3,000 more a year than their Italian counterparts.

The €1,000-a-month Dream

For unskilled workers, in Spain, Italy and Greece, the jobs reality is even bleaker. In Spain ten years ago, “mileurista” — a term to denote someone earning €1,000 a month — was coined to highlight the plight of young workers with low-paid jobs that could never dream of owning their own flat. Today, with a youth unemployment rate of over 40%, becoming a “milleurista” has become something to aspire to.

The alternative is the eternal internship carousel. In the complete absence of any kind of inspection regime, young workers are being shifted from one internship contract to another where they put in full-time shifts day after day in exchange for little more than their lunch money and bus fare home. Few of them will ever get hired full-time, and those that are, are invariably given a short-term contract that, once expired, is replaced by yet another. According to the Spanish daily ABC; of the 1.7 million job contracts signed in December last year, over 92% were for temporary jobs.

Yet somehow Spain’s new generation of unemployed, underemployed, badly paid, or “ni-nis” (NEETs) will soon be expected to maintain over eight million pensioners, who are living longer than ever and are used to earning an average state pension of €906 a month, the second highest (as a percentage of final salary) in Europe after Greece. As Spanish economist Juan Torres López writes, the idea that Spain’s youngest workers will be able to support the country’s swelling ranks of pensioners is risible, especially with Spain’s government pilfering the Social Security fund for other purposes like there’s no tomorrow.

The same goes for Italy whose crisis, in many ways, has barely begun. As in Spain, many of the country’s most gifted young workers will continue to migrate to better performing economies such as Germany, Switzerland, and the UK. With the many programs offering study and work opportunities to young people abroad, such as Erasmus+, “the choice is not so much whether to leave, but whether to stay,” according to a report by Fondazione Migrantes.

For companies in Northern Europe, the mass exodus of young talent from the South means cheaper labor while the governments pick up the income tax. But for countries like Italy and Spain it represents a hemorrhage of talent and skill, much of which was developed with public funds, with no corresponding return. And in that manner, the fiscal health of economies in Europe’s South, already pushed to the limit, will continue to decline. By Don Quijones.

Italy’s predicament is a multi-headed Hydra that the Eurozone tries to ignore. Read… Eurozone Whistles Past its Biggest Threat


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  1. Colonel Smithers

    Thank you, J-LS.

    French TV recently featured the migration of young Italians. It appears that the UK, Switzerland, Germany and France are the most popular and provided the examples. I have observed young Italian and Spanish migrants in Australia and Mauritius, too. In some cases, they have some family links, which helps.

    When visiting Italy and Spain, I had noticed the multi-generational families under one roof, going out etc. It reminded me of what Mauritius was like for the decade or two after independence (1968), although the island’s culture (often francophone Catholic) is a bit family oriented, so there is little pressure on adult children to move out. That does allow young adults breathing space, especially when the economy is depressed.

    I compare that to the UK where I often hear / see of young adults being encouraged, if not ordered, out of family homes. A former line manager, wealthy enough to live in south Kensington, does not want his (two) adult children at home. They are in their mid-twenties, but struggling to find permanent work / long-term contracts.

    There is a term in South Africa, the lost generation. It applies to the children who grew up in the 1980s and early 1990s as the struggle against apartheid intensified (and had their formative years and education disrupted to the extent that their participation in society and the economy is negligible). I wonder if the same will be applied to the generations in Europe and the US who were betrayed by neo-liberalism. And then, last night, CNN’s Fareed Zakaria had the nerve to suggest that Putin had stolen the election from a Clinton who was going to do so much for the US. I did know whether to laugh or cry.

    1. divadab

      “I did know whether to laugh or cry.” – Righteous anger motivates action – why are you still paying for cable so that the masters can program your brain? Just turn your back on the fakery and mind control, don;t buy their shit. My rule (borrowed from Michael Pollan) is not to buy anything advertised on teevee. It’s all bad for the planet and for humans.

      1. Colonel Smithers

        Thank you, Divadab. Fair comment.

        I watch the channel from the UK and have it as a package with good stuff that I want.

        1. Toske

          That’s how they get you to pay for, and watch, propaganda: by packaging it with the good stuff. And it works.

    2. PlutoniumKun

      The number of young Italians and Spanish all over Europe, usually working in cafes and restaurants, is very noticeable. In the short term its a sensible route for young people to travel and work, learn another language, etc. Its a benefit for everyone if they go back to their home countries with new ideas and a wider education. But if they don’t, then only the host countries are benefiting. It is a serious issue for countries if they have a combination of low birth rate and high youth emigration, the long term prognosis will not be good. It may well be even more serious in societies where the social welfare net was always based on mutual aid in extended families.

      1. Andrew Baker

        As a millennial myself I cannot agree with your statement more. I live in the UK and most southern Europeans I see work in the hospitality sectors particularly cafes and restaurants. I have no problem with immigration per se, I have many friends of the countries you pointed out so I have direct experience/relationships with them. They all say it themselves, when I’m out socialising, that most young people back ‘home’ as they put it want to move to the UK/Germany because of the situation back in their home country. I agree with you that the most important issue is not the damage over here, as we slurp up our coffees, but the long term damage this causes their home countries. How does one go about solving the issue? I’m out of ideas.

        1. Colonel Smithers

          Thank you, Andrew.

          It appears that southern Europe is undergoing what happened to the former colonies, especially after IMF Structural Adjustment Programmes were imposed.

        2. visitor

          the most important issue is not the damage over here, […], but the long term damage this causes their home countries.

          I disagree, there are equivalent medium to long-term damages impacting both the countries of emigration and those of immigration.

          Case in point: education.

          Because of brain drain, at some point countries of emigration will no longer have enough resources (not just money from taxes on employed workers, but also experienced people to pass their knowledge and skills on) to sustain a robust education and training system.

          But likewise, countries of immigration, getting those new recruits from outside, for cheap, and without having had to pay for their education will at some point feel that they can reduce investments in education and training — after all, they can always get skilled people from foreign countries if the need arises.

          The result: neglect and degradation of educative systems in both types of countries.

          1. visitor

            neglect and degradation of educative systems

            And by this I mean not just state education, but also corporate-internal training and apprenticeship systems.

          2. Grumpy Engineer

            You make an excellent point. “Brain drain” is going to be a real problem. Who is most likely to leave Greece or Italy for fairer and less debt-ridden lands? The ambitious and well-educated, which is the exact subset of the population that needs to be retained if you want to have any hope of “growing” your way out of the debt problem.

            And toss in the fact that emigration will exacerbate the rate at which the population is shrinking (and thereby the rate at which debt-per-capita grows), it’s difficult to see how this will end with a positive outcome. Bankruptcy may be the only way. Otherwise, those who remain in Greece and Italy are destined to be crushed by all this debt.

          3. Andrew Baker

            Hi Visitor,

            It’s a nice angle of analysis and I never thought of it that way. I agree with you that it is likely to have ramifications for both countries involved, to what extent and in what way I do not know. You see I’m no expert. Many thanks for your response.


            1. Gman


              Only got to look at the NHS to see that it has.

              Politicians invariably take the path of least resistance and are always looking at way to reduce spending or investment, particularly when the chickens don’t come home to roost on their watch.

              Much as it pains me to say so, ‘Paul Nuttalls from ukips’.


              has been pilloried for using much the same point, although arguably for different reasons.

      2. Colonel Smithers

        Thank you, PK.

        None of the ones I know from the south of Europe plans to return unless it is for retirement or care for an elderly loved one.

        Most of the ones I know from eastern Europe plan to return, but will apply for UK citizenship first, especially if their children were born in the UK.

      3. cojo

        I think the issue has a few more layers of complexity which are not being discussed here. First, most of these countries have less fluid employment markets, with significant nepotism, and very little worker turnover leading to few openings for new hires. These traits have been codified into the law in these counties through political favors to special interest groups and are now very difficult to break down. This makes for a stable/safe career, but only if you can get your foot in the door.

        Another thing that is not being taken into account are remittances. The brain drain you speak of may not be so bad economically as long as significant parts or earnings are brought back into the poorer southern countries economies. This means people are less likely to outright starve although it does little to develop a dynamic economy outside of the service industry. I think many people in the poorer south had high hopes of changing their economies from tourist/agriculture to higher tech/industries like the north by entering the Eurozone, however this has been much more difficult than anyone imagined.

    3. Jerri-Lynn Scofield Post author

      I considered writing an introduction to this post using exactly that phrase– the lost generation– but didn’t, as I decided I didn’t have much to add to this essay. But you, Colonel Smithers, and I are certainly on the same wavelength.

      1. Colonel Smithers

        Just to add, J-LS. The idea of a lost generation does not enter the minds of the “racaille neo-liberal” in Brussels, Frankfurt, Berlin etc.

        On that French TV programme, an Italian minister was shown saying that the migration was no loss as the unproductive members of society were leaving. That caused a political storm.

        As we are on an EU thread and further to the SPD’s defeat in the Saarland yesterday, I have come across Schulz in Brussels and consider him the Nick Clegg of Germany, a neo-liberal making nice before power.

      2. DanB

        I met a young Italian working as a waiter in a Berlin restaurant in 2014. He told me that there were simply no employment prospects for him and his peers in Italy. So he came to Berlin to find work in an Italian restaurant. He was taking university classes in Berlin. His personality was bubbly but his realism about being an economically superfluous person came through. I thought him part of an abandoned generation. When I teach my students about identity and socialization they become interested in how long term postponement of entering adulthood affects their self concept and is in turn connected to the political/economy in which they live. Most are living at home and, as one put it, “Driving a car with nearly 200,000 miles on it.”

        1. Colonel Smithers

          Thank you, Dan.

          Your phrase of an abandoned generation is even more appropriate.

          My parents migrated from Mauritius in the mid-1960s. I know many former colonies well. It seems that southern Europe and parts of northern Europe and the US (let’s call it fly over country, without intending to offend) are becoming like some, but not all, of these former colonies. Brian Schweitzer, who had worked in Libya, once likened Montana to a colony.

          It reminded of a Socialist Workers Party sandwich board in Oxford about twenty five years ago. It stated that the reasons people are poor in the third world are the same reasons why people are poor in the first world. The young man carrying the board that day was not wrong.

      3. Thor's Hammer

        Their is an unexplained gap between the situation you portray and that disclosed by statistics of wealth in Italy.

        Median wealth by country: 2014

        Italy: $142,296
        USA: $53,352
        Greece: $53,375

        That’s right! The typical Italian citizen is nearly three times as wealthy as his American counterpart!

        Median wealth is the net worth of the individual in the exact middle of the income spread, whereas average wealth is simply total wealth divided by # of citizens. In a highly unequal class society like the USA average wealth can be $344,692 while half of the population doesn’t have enough savings to cover a $500 emergency.

        If “wealthy” Italy is indeed the home of a grim lost generation of youth, something strange must be happening between generations. Is the case really that the middle class has cast out it’s offspring and is denying them access to the family wealth? Is your description of a lost generation simply a product of unscientific rumors? Or can the pattern be explained by different family organization and social standards? Or by lack of access to borrowing and resultant debt slavery as prevails in the US?

        1. Gman

          You make a fair point.

          As you allude to, it can of course be explained as a measure of inequality within those societies.

          The USA is clearly and hardly surprisingly one of the worst performers in this respect as it is the most adept at executing the neoliberal ideology that informs and so deliberately exacerbates the wealth gap.

          Clearly the Italians and many others, particularly those in western Europe’s former social democracies, have some catching up to do, but I’m sure it’s not for want of trying.

    4. fresno dan

      Colonel Smithers
      March 27, 2017 at 4:57 am

      Thanks for that back ground – enlightening

      1. Colonel Smithers

        Thank you, Dan, and greetings from the City of London bathing in spring sunshine.

    5. reslez

      Here in the US I recently overheard a conversation between two ladies at a hair salon. One mentioned her two children were in college and one was about to graduate. The other asked if they were going to “move back in” soon, and the first lady said yes. Both spoke as though this was completely expected and normal, without a hint of acknowledgement that it would have been considered extremely unusual and a sign of personal failure as little as 15 years ago. I think we have new norms in the US too.

      1. Colonel Smithers

        Thank you, Reslez.

        It is seen as a sign of failure in northern Europe and with some people from southern Europe. I have never understood why. I know many single people, well into middle aged, who live at (the parental) home and seem happy to do so and contribute to the household.

        1. reslez

          In the US it used to be outlandish for a person in their 20s to live with their parents. How quickly that seems to have changed.

          When my sister graduated and was job hunting she lived with me for 4 years. Since she was only marginally employed I never dreamed of charging rent (she helped out with the utility bill). I considered it a smart way to help out a family member. I think she felt more hesitant, which is normal for someone undergoing the stress of trying to start her adult life.

          I think people who lived through the housing bubble are far more cautious about stretching to buy a home. Despite earning a decent salary I never seriously considered buying. Job tenures are just too precarious. When my parents suggested I move in with them I gave it serious thought as a way to build up savings.

          People who are fortunate enough to have that kind of family situation should take as much advantage of it as they can. But this attitude in itself is a product of post-economic crisis thinking. And as the economy continues to deteriorate for 95% of the income distribution, there will be more need and fewer people in a position to help.

  2. Robin

    Italy and the international image it conveys is very seductive. Fashion, design and culinary delights capture a global imagination. Beneath this refined surface are a host of issues this article raises. When we think of Italy, we often think of the large cosmopolitan centers of Milan, Rome, Florence and Venice where the coalescence of global wealth and runaway tourism, creates an illusion of prosperity. Traveling into the smaller villages and hinterlands, another bleaker portrait emerges. It’s a reality we don’t see, it’s not in brochures or tourist itineraries. An analogy that comes to mind is middle of America, the neglected small towns and cities that roared to life in the election cycle of 2016.
    Italians are extremely resilient people who have historically relied on reserves of family savings. Their nest eggs have buoyed their housing market in the face of the housing busts the neighboring countries have experienced. Housing prices in Italy are as vulnerable as the future prospects of 20 something year olds.

  3. Steve H.

    One of the variables in Turchin’s political instability equation is the number of people age 20..29.

    There is a positive side to a lower number of people leaving the family home that I’ve seen a few times already. When they can work through the generation gap issues, those families can become stronger as a unit, which is invisible to national productivity stats. An example I’ve seen both sides of is upkeep of the home, such as ladder work. The elders have less balance and more dizziness, and without a younger to clean the gutters, the elders are reliant on hiring, and more than once I’ve seen them scammed.

    There’s a pattern that goes back at least a century, of companies moving families away from traditional neighborhoods to more isolated areas. The primary dependency becomes the company, not the family. But the company can get replacement workers and don’t care about the secondary effects of the isolation. Stress, especially on young parents, increases without the daily wisdom of elders who’ve been through the trials, pharma fills the gap (at least around here), and the simple succumbs to the complex, with greater instability the outcome.

    1. paul

      Reminds me of one of Plutonium K’s less admirable countrymen (if PK is in Eire),

      Peter Sutherland. He seems a staunch advocate of a euro wide,deracinated, gypsy (without their particular mores) proliteriat.

      Wikipedia has him down as an international business man. None of his businesses seemed to have strayed far from both catastrophe and and political salvation.

      “the European Union, in my view, should be doing its best to undermine” any “sense of our homogeneity and difference from others”.

      I think,in his crassness (after all it’s worked for him and his family), he’s a lot more honest than most in that milieu

      “Engineers, doctors and nurses are in short supply; so, too, are farmhands and health aides. And Europe can never have enough entrepreneurs, whose ideas drive economies and create jobs”

      We’ll just have to take Pete’s word about a self correcting system that will all work out for the best.

        1. paul

          As a polyglot, do you resent the immigration of the term ‘entrepreneur’ to the detriment of the old fashioned ones of ‘middle man’ and ‘undertaker’?

          Europe can never have enough middle men, whose ideas drive economies and create jobs”

          Europe can never have enough undertakers, whose ideas drive economies and create jobs”

      1. Gman

        European Commissioner eh?

        The Goldman Sachs connection…. cheque!!

        The shady Bilderberg Group… more cheques!!!

        The EU corporate carve up artistes aka The European Round Table of Industrialists…even more cheques!!!!

  4. Katharine

    How not to present statistics:

    Eurostat statistics in October 2016 showed that less than a third of under-35s in Italy had left their parental home, a figure 20 percentage points higher than the European average.

    As written, that implies that the European average is only a little over ten percent of under-35s have left home. From context, I doubt that is what he meant, but if I had only this for a source I would not dare assert what the European average was.

    Though he didn’t cite statistics for this hemisphere, we know the problem is here too. In a lot of urban neighborhoods youth unemployment has been in double digits for years, if not decades. Now it also affects people who had more “advantages” and according to what their parents were taught should have been all right. I think that, as with drug addiction, this spread may finally force a recognition that the problem is not due merely to moral failings of those who suffer it, but the toll it is taking in the meantime is horrible.

  5. Colonel Smithers

    The above stats are a wet dream for this lot, As you can spot, one of the directors is Guy Verhofstadt, leader of the (neo-)liberals in the European Parliament and the Parliament’s negotiator on Brexit. The Hof, known as Baby Thatcher in Belgium when younger and perhaps more radical, and his gang are keen on neo-liberal solutions as he and they profit from such solutions. His membership of the investment company’s board is rarely mentioned.

  6. Eustache de Saint Pierre

    A slowly unfolding tragedy within a beautiful country, to which one can add the increasing refugee problems in the South, which due to many factors, are unlikely to lessen. It does all strike me that this & the loss of young graduates, will inevitably lead to a much more low grade economy, which is to my mind the opposite of what they actually need.

    Perhaps it was here that I read a disturbing report on the mistreatment of female migrant workers in Sicily, something that I imagine could also happen in the South, especially Naples, where the Camorra is presently involved in a drug related turf war, which has led to calls to send in the army.

    1. Colonel Smithers

      Merci, Eustache.

      There is an overlap between the eternal internship carousel and the mistreatment of female migrant workers. Many women are sexually exploited in places white collar work places in London. Others sign up to be escorts, so they can make ends meet expensive places like London and send money home.

      Perhaps, Der Spiegel could join the dots and put the blame on where it lies. That would be asking too much, perhaps.

      1. Gman

        “Perhaps, Der Spiegel could join the dots and put the blame on where it lies. That would be asking too much, perhaps.’


  7. maelcolium

    Does anyone have access to the dependency ratios? This will provide a better guide than popular observations.

  8. templar555510

    The whole neoliberal agenda is out-of-step with social and economic reality on the ground. Hence no politician
    of note, or not, wishes to tackle ANY of the issues addressed in this piece, or any other issue that requires a rethink of the trajectory. Remember ‘ Change You Can Believe In ‘ . So we have this massive cognitive dissonance in our societies at large and our governing class either unable, or unwilling to put forward ANY policy that might open the way, however slightly to something BEYOND where we are now , and where we are headed if the neoliberal trajectory is maintained. And where we headed is a collective nervous breakdown and its aftermath .

    1. Colonel Smithers

      Thank you, Templar.

      We are certainly there with the nervous breakdown. The opioid epidemic in the US needs no introduction to these pages. Mum works in social services in Buckinghamshire (think Connecticut) and reports the same.

      My parents will be 73 this November and still work, mum in social services (admin) and dad a doctor. They have been asked to stay as there aren’t enough experienced / qualified staff to cope with that breakdown. Social workers are being recruited from Romania, South Africa, Zimbabwe and New Zealand. Doctors and other medical staff from further afield. Brexit will complicate matters.

      1. animalogic

        Why exactly does the UK have this (seemingly) never ending issue with finding its “own” teachers, nurses, etc etc ?

        1. Colonel Smithers

          Thank you.

          These professions have been abused for years and are badly paid. Most of the public sector / services is broken, demoralised and underresourced. No sane local would want the aggravation.

          It must also be said that there is a big pool of locals who are happy to drift and not make an effort.

  9. a different chris

    I have to call this out, though:

    > (a staggeringly low 58 for men and 53 for women)

    The Lump of Labor fallacy cuts both ways. There isn’t a fixed amount of work in either direction. It certainly wouldn’t be staggeringly low (in fact would probably still be too high) for Germany nowadays. I would need a lot more data – and even then would probably just throw up my hands in frustration – to understand if this is even part of Italy’s problem right now, and if it is it’s, you know, pretty transitory as the world goes. Hint: people don’t “stay” 58 years old.

    People leaving Country X because they needed better prospects resulted in 20th century America, so let’s not make too big a deal of it. The question that needs asked is more along the lines of “how come they did that and just became baristas?”.

    1. lyman alpha blob

      “People leaving Country X because they needed better prospects resulted in 20th century America…”

      Except there is no 21st century equivalent – all those European immigrants came to North America only after explorers had discovered it was there.

      Pretty sure the satellite photos aren’t missing any major new continents today.

      And immigrants taking low paying service jobs in already full countries only makes the jobs pay even less. You can’t run an economy where everybody just cuts each other’s hair (or pours their coffee).

  10. ChrisAtRU

    1. Make money “scarce” to benefit those who hoard it as a “store of value”.
    2. Advocate wage depression and state fiscal contraction in the name of “competitiveness”.
    3. Recoil in disbelief when the architects of this madness are voted out in favour of extremists.
    4. Use the one exception to #3 to re-validate #’s 1 & 2
    5. Rinse, Repeat

    The lost generation is going to run out of places to go pretty soon if the global neoliberal onslaught continues.


  11. Dave

    Many of you here are economically-oriented and liberal. How do you reconcile what you’d like to see here in the US with Europe’s problems?

    1. Katharine

      Could you clarify your question, please? Many of us bristle at the bare suggestion of being liberal, while others use the label but perhaps in an older sense than is current. At least for me it would be anybody’s guess what you mean by what we’d like to see here, and I haven’t a clue how any of what I personally would like to see would need to be “reconciled” with Europe’s problems, which as I noted above are not confined to Europe.

    2. Steve

      Implying that these troubles are due, purely, to Leftist policies as opposed to corporate control of the economy and government.

  12. TG

    This should highlight the lie that advanced countries need to import surplus third-world labor because the natives refuse to have ‘enough’ children (as defined by the elites who are presumably never wrong in such matters).

    In all nations of any size that have become prosperous, people are generally careful not to have more children than they can support. So if times are bad, the fertility rate falls, and eventually the fertility rate picks up again after the labor market has improved. Think the United States during the great depression. But if the growth of the population is forced upwards by importing foreign labor, the labor market never recovers, and the native fertility rate remains low, even as the overall population continues to grow. And the country becomes poorer.

    We are told that we must import massive numbers of foreign workers to ensure the viability of our retirement systems – Italy surely shows what a lie that is. It is the opposite: by keeping wages low, forcing population growth lowers GDP/capita and will eventually kill the retirement system. Remember, a decent retirement system is based on a high GDP/capita, NOT some arbitrary ratio of workers to retirees. In a nation like Somalia with a per-capita GDP of maybe $1000, who cares how many workers to retirees there are? And in Switzerland with a GDP of $80,000 per capita, well, there is surely plenty to go around no matter how many old people there are? Yes?

  13. TheCatSaid

    And–not as unrelated as it may seem to this great post & comments–whatever happened to Monte Pasche di Siena bank, which was hours from collapse a couple months ago? Now it is never mentioned.

    What made the Italian banking crisis disappear from view? Did those problems also “emigrate” or “move in with parents” Who’s now “taking care of” those problems?

    1. Colonel Smithers

      The zombie bank is being touted for another rights issue / recapitalisation, but, as usual with the EZ crisis, it is has gone quiet, but is likely to bubble again soon. Perhaps, a strong showing by Marine Le Pen in the first round may spark the crisis back to the front page.

  14. loblolly

    For a modern economy to function currency must circulate. The currency is not wealth, wealth is what is created with the work that is exchanged for the currency. Millions of people sitting on their asses because they cannot economically interact with each other because there is no currency to facilitate it seems like an absurdest stage play designed to frustrate the observer.

    Wealth is being left to die on the vine as long as people are being prevented from working for each other. All for the lack of an abstract marker that has no intrinsic value.

    Is this so hard to understand for the people in charge?

    1. reslez

      What the people in charge understand is that the current way gives them 108% of the increase. Doing it the other way would lower their percentage. It would be a larger increase overall and would improve the societies they live in but that doesn’t matter to them. It only matters that they take, take, take.

  15. Norm

    I live in Gary Indiana, and own apartment buildings in a very bad neighborhood on the West Side of Chicago (you may have heard about it lately as the place with all the murders.) In Chicago I often meet at restaurants and coffee houses young Italians and other foreign workers – they’re usually pleasant, over-educated young people and still, I sense, generally optimistic about their prospects. (Note, using the term “over-educated” is not intended to be pejorative.)

    I’m sure all that the article and the above responses have to say about Italy and the rest of the global south is pretty accurate. BUT, how about a little perspective here. In Gary and Chicago there are tens of thousands of young men and women in their second and third generations of economic irrelevance often without the backstop of a supportive family. And I shudder to think of how much worse it is in how many places in this mess we call the world.

  16. lyman alpha blob

    It’s getting to be that there’s a very small window where people can expect to support themselves and their families through gainful employment.

    The young can’t expect to until they’re well into their 30s and anyone over 50 had better cling to the job they have because prospects for older workers, especially men, aren’t very good either.

    Looks like we’ve got just over a decade to make enough money to last a lifetime now.

  17. Scott

    As a man who has at least been reading economics for 5 years I see what Michael Hudson writes as most correct.
    It is pretty doubtful that those who benefit so from status quo financial practices will give international labor Industrial Service Banks & are fine with economic terrorism since the system they operate gives them deeds every time they wreck it.
    Moral Hazard is no joke.
    The US pattern has been established. Finance banks rule. A shared interest, goals that matter is more about hook or crook subsidies, bailouts, or mobster financial engineering world wide.
    Nothing works if you don’t believe in it.

  18. Felix_47

    How does this make any sense when the European politicians keep saying we need more third world immigration from the mideast and Africa so we have more workers? Here in Heidelberg we are inundated with thousands of jobless male young punks from every corner of the mid east and Africa. The women in my family don`t go out on the street any more. It is ride to the store in the SUV all the time for them. We are adopting the American life style…..ride around alone and stay away from the downtowns and the newcomers.

    1. Eustache de Saint Pierre

      And yet it seems, robots are set to take many jobs anyway. In terms of social cohesion, it does not strike me as a sustainable recipe for success.

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