“The COVID crisis has so far mainly affected precarious workers and sectors that relied heavily on seasonal work (e.g. tourism, agriculture). Foreigners therefore suffered heftier job loss rates (-3.7 points) than Italians (-0.6 points). Yet foreigners still account for 9% of the GDP and remain crucial in many sectors”.
The Leone Moressa Foundation’s latest report on the economics of immigration, presented at the Chamber of Deputies, helps to dispel many myths about foreigners in our country and highlights how the pandemic-steeped crisis has particularly affected immigrant workers, especially women. The immigration economy figures turned negative for the first time in many years, accompanied also by a drop in work permits. However, the share of foreign entrepreneurs is growing.
While 456,000 jobs were lost in 2020 and one third involved foreign workers, the majority were women.
Enrico Di Pasquale, Researcher at the Moressa Foundation
“The data we have on hand about new entrepreneurs show that many workers were forced to set up on their own businesses for reasons of necessity, yet it is also a culmination of the growth that had already begun some time ago, and which therefore undoubtedly highlights a different spirit on the part of foreigners in our country”, explains Enrico Di Pasquale, a researcher at the Moressa Foundation.
The most striking feature is certainly the decline in jobs: The employment rate for foreigners (57.3%) is below Italians (58.2%) for the first time. At a territorial level, it is noticeable that the percentage decreased more in the Northwest and Islands, while the Northeast recorded the highest decrease in the employment rate of Italians (-1.3 points).
“The reason is simple: foreigners were the ones who suffered the most from the pandemic, since their jobs were not protected by the redundancy freeze“, Di Pasquale points out. “Of course, that’s not all there is to it. The number of employed Italians fell by 1.4% while foreigners fell by 6.4%: They have certainly also paid for the greater concentration in the sectors most exposed to the crisis, such as restaurants and catering“.
Women were among the hardest hit. “While 456,000 jobs were lost in 2020 and one third involved foreign workers, the majority were women, who are even less protected than men”, Di Pasquale points out.
The rise of entrepreneurship
There is a surprising trend, however, in the entrepreneurial sector, as the COVID crisis did not brake the expansion of foreign-run businesses. There were 740,000 foreign-born entrepreneurs in 2020, accounting for 9.8% of the total and up 2.3% on 2019 and even 29.3% on 2011. In contrast, the number of Italian-born entrepreneurs fell by 8.6% over the same period.
The most numerous nationalities were Chinese, Romanian, Moroccan and Albanian, but the most significant growth was recorded among those born in Bangladesh, Pakistan and Nigeria. The sector most affected by this growth has been construction, where foreigners account for 16% of entrepreneurs in the sector. “This, however, is the only positive news in the world of work, as the other data are certainly not positive”, Di Pasquale points out.
The historical minimum of entries for work
The problem is also linked to the fact that, again in 2020, we saw a record low of just 10,000 work permits out of 106,000 entries, most of which were for family reasons.
The report also tallied €134.4 billion as the added value produced by foreign workers in 2020.
“The figure is certainly striking and can have negative effects, especially in certain sectors such as agriculture, where foreign labour is crucial”, Di Pasquale stressed. Yet there is also another important fact to bear in mind. “While we have five million foreigners in our country, we shouldn’t forget that every year almost 100,000 of them become Italian citizens, which means that nearly one million foreigners have become Italian citizens over the past decade”, Di Pasquale points out.
An essential contribution to the economy
Despite the crisis, however, immigrants remain central to the Italian economy. The added value produced by foreign workers in 2020, according to the report amounted to €134.4 billion, 9€ of Italy’s GDP, with agriculture (17.9%) and construction (17.6%) accounting for the largest share.
The 2.3 million foreign taxpayers in Italy reported a 2020 income of €30.3 billion, paying income tax of roughly 4 billion. When adding up the other revenue items for the public coffers (income tax, VAT, local taxes, social security and welfare contributions), this amounts to 28.1 billion. Meanwhile, the impact on public spending is around 27.5 billion.
The Moressa Foundation report thus concludes that the balance remains positive at 600 million. “Foreigners are young and have little impact on pensions and healthcare, the main items of public expenditure. For some time now, however, we have begun to notice that the birth rate curve is in rapid decline”, says Di Pasquale.
The proportion of foreigners in 2005 was 3.8% of the population, but today it is 8.2% and exceeds the European average of 6.7%. Although the migratory balance in Italy is still positive, mainly due to family reunifications, the levels are lower than in the past. This is a factor that the economy of an ageing country like Italy will have to take into account.