It is no wonder, then, that many Italian companies prefer to take the illegal route and pay their employees in nero (under the table). Figures from the Italian Institute of Economic and Social Research (IRES) in 2009 pinned the underground economy at about 15 percent of the GDP, while police stings nationwide regularly reveal that about half of the companies probed are paying employees under the table, 10 percent of whom are foreigners according to IRES. That makes Italy one of the worst offenders in Western Europe, and the real numbers are probably even higher. Large companies periodically hold appreciation days for local law enforcement communities, inviting them to sample the goods, ostensibly in return for lenient inspections.

The lack of an outcry against laws that engender such behavior means that things aren’t likely to change soon. Prime Minister Silvio Berlusconi, who ran on an antiestablishment platform, was only codifying a time-honored tradition when he decriminalized false accounting. Cooking the books has always been seen in Italy as a necessary evil in the face of an oppressive state. It remains to be seen whether that law will be revisited now that Berlusconi has faded from public life.

While working under the table may be a tempting offer in order to avoid the hassle of never-ending Italian paperwork, the truth is that an employee has little to gain by taking such a risk. Freelancers, as they are euphemistically known, do not have access to the extensive health care that full-time contracts provide, nor will they receive social security payments when they retire. It’s not altogether different from the situation in the United States, with one important exception: Italians depend almost exclusively on state pensions for their retirement. The concept of the private retirement fund is only slowly catching on, and frankly, it’s hard to save for your golden years when your pretax income is only ‚1,250 a month.


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