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Italy’s declining population will only compound its enormous problems

Italy’s economic and social malaise has been playing out in slow motion for the last 30 or so years, and many of the structural issues that plagued Italy then still remain unresolved today. At present however, the Italian population is undergoing a heavy decline, thanks to both natural change and changes in migration trends that precede the current government’s hardline positions. With few sound policies in sight and seemingly no reversal in its demographic fortunes forecast, Italy will probably experience greater additional difficulties before realistically seeing improvements in what is by all measures a dire predicament.

Italy is an old country. So far, nothing new. With just over 22% of its population aged 65 or over, and an estimated median age of 45.5, its population is in fact among the oldest on Earth. Additionally, the population has started to decline heavily, and with a fertility rate of 1.44 children per woman in 2017 as per the CIA World Factbook, it is far below the replacement rate of 2.1 children per woman. What is interesting here is that both native Italians and the immigrant population have below-replacement fertility rates, so while natural demographic decline began in 1993 and has been reversed only on rare occasions since then, in recent years it has become especially heavy. Demo-Istat, which is Italy’s demographic statistics service, reveals that last year Italy’s population declined by over 100,000 people, and that figure factored in positive net migration. The agency has so far published statistics only up to April of 2018, but even this limited set of data shows a situation that is clearly worsening: the net decline of 60,000 people is in the first four months of the year, and once again, migration has been factored in. In fact, despite interior minister Matteo Salvini and the far-right’s constant screeching about a migrant “invasion”, in April net migration was of just over three thousand individuals. For the entire country, whose population is just over 60 million people. Indeed such statistics might prompt the nativist to break out the champagne and celebrate the near-end of migration to Italy, yet it misses a series of key issues that Italy’s structural problems helped create, but that this population decline risks making far worse.

A new empty quarter?

Naturally, this population decline does not affect Italy in an equal way. While the majority of Italy’s regions register a natural decline in population, the northern regions that account for the bulk of Italy’s economy, most notably Lombardy, Emilia-Romagna, Trentino Alto-Adige, and the more dynamic areas of Veneto and Piemonte, maintain positive population growth thanks to migration from elsewhere in Italy or from abroad. The situation in Southern Italy and the islands could not be more different. Alongside their natural decline, they are also contending with heavy negative net migration as young people look north or increasingly emigrate to escape the lack of opportunity and social immobility that characterise these regions. Although Southern Italy’s population still stands at just over twenty million people when including the island regions, this is spread out over an area of over one hundred and twenty thousand square kilometres. The Po Valley, which contains most of Italy’s high-value industries and major cities like Milan, Turin, Brescia, Verona, has a similar population at roughly forty seven thousand square kilometres. One then realises how the South’s population decline is problematic, with Sicily’s situation especially alarming, registering a net fall of roughly twelve thousand people since the start of the year, nearly one-fifth of Italy’s overall decline. A decreasing population density in most of the South means that its already-struggling economy will encounter even greater difficulties in attracting investment, increasing the North-South divide and thus reinforcing this vicious circle.

This will also mean that revenues will decrease, and Italy’s notorious financial difficulties will continue, and probably worsen as money gets tight but spending obligations do not decrease. If the extensive modernisation of the education system and real incentives to attract durable investment to the country, and especially the South, do not materialise, there can be no improvement in this situation. And indeed, education, apart from a handful of well-run institutions, remains shabby overall, with an excessive focus on theory and little practical knowledge, as well little focus on languages and information technology that could make Italy more attractive to potential investors. Furthermore, Italy’s graduation rate remains poor compared to other countries. Eurostat’s 2017 statistics show that only 26.9% of Italians aged 30-34 had completed tertiary (EQF levels 5-8) education, compared to an EU average of 39.9%. To make matters worse, many young Italians don’t even make it that far, with the fourth-highest percentage of early leavers from education (ELETs), at 14% of 18-24 year-olds in 2017 compared with the EU average of 10.6%. However, the silver lining is that this figure shows a decreasing trend. With these issues burdening education, it’s not surprising that Italy’s youth must often look abroad to grow professionally, or even seek their education outside of Italy for a chance to succeed in the workplace.

Italy’s population distribution also creates problems in other ways. Roughly one-quarter of its municipalities (comuni) have a population of under one thousand inhabitants and approximately 10% have less than five hundred inhabitants. Using ISTAT statistics, the website tuttaitalia.it confirms that one hundred and thirty-five municipalities have a population of less than one hundred and fifty people. While this isn’t necessarily a problem (France has far more communes and most of these have very small populations), their geographical position and the nature of Italy’s economic structure poses problems. Most of these municipalities are isolated, with many in Italy’s mountain areas in the Alps and the South, far away from major population centres, and therefore far away from high-quality services and economic activity.

This means that their economies are generally seasonal, and that their permanent population is overwhelming stacked towards the elderly, therefore these municipalities are rarely able to raise the significant revenues necessary to attract investment and retain the young who could give these places a future. A large part of these settlements will face difficult choices in the near future, either having to merge with other municipalities (“fusione di comuni” as it’s known in Italian), or enter a process of managed decline in preparation for total abandonment, all the while attempting to obtain financing from their regions or the central government for additional funding to cover key services, attempting to integrate these services with other municipalities, or choosing to cut them altogether. The first measure is deeply unpopular, as it often means cutting jobs and ceding administrative control to the more dominant municipality involved, and the other is naturally difficult to accept as many of these municipalities offer a window into a more traditional and less hectic lifestyle that many Italians and visitors rarely get to experience in a genuine sense.

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Matteo Salvini

 

So far, Matteo Salvini has as usual made generic noise about this issue, while of course not explaining any clear strategy to resolve it. He has made vague references to the “French model” of generous parental leave, tax incentives, and comprehensive state-funded daycare which helped France reinvigorate its population, but so far nothing concrete has materialised, and his 5-Star coalition partners have not made any noteworthy assertions on the matter either. Aside from Italy’s woeful public finances which make funding such generous measures a near-comical impossibility, implementing the “French model” in Italy would be extremely difficult anyway. Firstly, a comprehensive or affordable daycare system allowing families to leave their children in professional creches so as to return to work quickly is not widely available at present, so many women put off having children for fear of difficulty re-entering the job market, or enlist the help of grandparents and other relatives to avoid losing their jobs. To add to this, the difficulty many young people face in entering the job market in the first place, let alone secure stable and dignified employment, has helped consolidate the stereotype of the Italian “mammoni”, adult children who stay at home with mamma and papà often well into their thirties (Italian media outlet ANSA places the figure at 66% of 18-34 year-olds in 2016) due to the impossibility of becoming financially independent before then. When a large proportion of young people find themselves in such a predicament, it’s only natural that they postpone starting families until much later compared to their European counterparts, or even don’t start families at all, hence the low birth rates.

No way out

All this means that Italy’s already-high dependency ratio is set to worsen, with predictions foreseeing a continuing increase in the elderly population, the small share of under sixteen remaining stagnant, and the working-age population shrinking further. Despite the issue of emigration due to lack of opportunity and unemployment, Italy still has a considerable skills shortage, especially in professions related to medical care,  down to nonexistent legitimate recruitment networks  and the inefficient “concorsi” (public-sector recruitment exams) that have stopped working on the basis of meritocracy and more on nepotism, leading to many posts away from desirable locations remaining unfilled. Instead of addressing these issues with concrete proposals and tough but necessary actions, the current government has thrown Italy crumbs with a mix of fear-mongering and cheap cynical giveaways that only serve to satisfy short-term selfishness and do not provide the country with any sustainable path forward into the future. In fact many of these measures will only burden the next generation with more taxes and debt, and La Repubblica states that indeed cuts to education have been agreed to help finance these measures – many of those in power know this.

After all, their main objective is staying in power by pleasing their base, or making sure these problems are not solved in order to continue playing on a narrative of Italy as the victim of outside deliberations, and Italians as poor sufferers denied things everyone else seems to have. And of course, the young have been marginalised once again, with virtually no measures aimed at improving education or integrating graduates into the workforce in a better manner, and they will be the ones who pick up the tab for this clientelistic spending. Another possible side-effect is the reinforcement of organised crime, given that they will face little competition from legitimate investors for resources and a workforce willing to accept desperate working conditions, as well as regions desperate for inflows of money whatever the source, and officials often known to turn a blind eye when either money or threats are produced.

This means that Italy’s exodus of young people is unlikely to stop any time soon, and its population decline will continue, further decreasing revenues and discouraging investment. The two parties in government have played on fear and resentment of the “other”, yet they do nothing to boost Italians’ confidence in their economy and society, far from it. For the sake of maintaining power, they continue to play to a sense of grievance and malaise, all the while doing nothing to address the root causes of this malaise, and refusing to acknowledge the exodus of Italy’s young, working rather to tailor the country to its elderly population’s worldview and vested interests. Salvini talks about closing down migration routes and attracting only “good” immigrants, but nothing is done to attract these “good” immigrants, despite certain skilled labour categories crying out for workers. Luigi Di Maio’s energies are focused more on threatening companies with fines if they outsource from Italy within five years of receiving state support. Not that this is necessarily wrong, but it does absolutely nothing to attract new investments which could help Italy get back on its feet. If the government’s policies have a chance to entrench themselves, Italy will never be a confident country with a robust economy capable of providing for its most vulnerable citizens. At this present rate, Italy will be a much diminished country, fearful and resentful of outsiders, and stuck in a mentality of never being able to improve, all the while continuing to age demographically and fall further behind in terms of global engagement, economic structure and performance, and quality of life and education.

At a time when we desperately need new blood and a break from the past, the country increasingly looks to an idealised past that never existed and will never be reproduced, built by strongmen whose crimes continue to be minimised. I want to be optimistic and say that things will improve soon, but there’s little to cling onto. Maybe I’m wrong, and this government will restore Italy to impressive heights, but I remain deeply sceptical. In the meantime, I’ll brace for the worst, and I’ll probably be joined by at least one more young Italian hungry for fulfilling experiences and personal development who sees no future at home. Don’t tell me I’m the only one, I know I’m not.

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