Official 1998 figures put the Italian workforce at over 23 million, with an unemployment rate of 11.5 percent, but these statistics fail to take the informal economy into account. Unemployment is substantially higher in the south and among the younger generation. Statistically, people from the south, under age 30 and with poor qualifications stand a 50 percent chance of being unable to find employment. Thus, both geography and age are major factors in the Italian labor market.
Italy has a number of trade unions which, although formally independent, are connected to the larger political parties. The strongest union has always been the Confederazione Generale Italiana Lavoratori (CGIL), originally of communist allegiance, but now affiliated with the leftist Democrats. Italian trade unions were very strong in the past, and thanks to their efforts in the 1970s and 1980s many Italian workers currently enjoy a high level of social protection. Some of this protective network is being dismantled, but the foundations remain in place. Following mass strikes and demonstrations in 1968 and 1969, a statute of workers' rights was finally made law in 1970, thus ensuring security of employment in larger firms. Smaller firms were exempted from adopting a number of the statute's measures, but its impact has nevertheless been considerable in promoting the rights of workers. Among other significant victories for the trade union was the wage indexing system, guaranteeing that salaries would rise in line with annual inflation; common job classification, which introduced standardized salaries throughout Italy for specific categories of work; paid maternity leave; and an increase in the number of paid holidays. Despite these measures, Italian workers are among the worst paid in Europe, and higher wages for all workers is a constant demand of the trade unions, since the strong and well-organized employers' associations do not ever award substantial increases. Poor wages, though, are generally offset by a number of other social benefits, and in recent years the working week has been reduced to 37 hours (down 2.5 hours) for the same pay. Furthermore, people who are laid off can count on employment checks for a number of months and are entitled to severance pay, no matter what the grounds for dismissal.
Workers in the informal economy tend to be poorly educated, live in high unemployment areas, and are often foreign immigrants. They are unable to take advantage of the benefits enjoyed by the legally employed, and their working conditions are inadequate. Those who run the informal economy ignore safety regulations, demand working hours that far exceed the legal maximum, make no contributions to pension funds, offer no job security, and give no severance pay. The informal economy has the greatest impact on farm laborers where work is seasonal, and on construction and textile production workers employed by small firms. Wages in the informal sector tend to be at subsistence level, but it is difficult to ascertain the actual figures. Despite the efforts of the EU to curb the informal economy in Italy and enforce safety regulations, over 1,000 workers die in the work place every year.
Trade unionism in Italy has been in decline since the mid-1980s and most paid-up union members are retired workers. The influence of the unions has declined due to the reduction of the workforce in the industrial sector, the skepticism with which the trade union elite is perceived, and government policy aimed at weakening the unions. Much that was achieved by the unions has been abolished or is on the verge of being dismantled. Privatization, liberalization, and budget cuts have reduced the protection network, and businesses have a far freer hand in dealing with the workforce. Consequently, employers' contributions towards pensions are being slashed, and overtime is not as well paid. The pressure of international competition and the necessity to maintain a healthy budget mean that labor costs have to be cut in both the private and public sectors. In order to preserve jobs, the trade unions and employers entered into a pact by which workers moderate their requests and accept cuts in exchange for job security.
Women have been entering the workforce since the early 1960s. They are a significant presence in all sectors of economy and tend to continue working after marriage, and even after having children. Many, however, are still employed in sectors that have been traditionally perceived as suited to women, such as education, health care and social services. The difficulty of coping with a full time job and raising children is a real burden to many women, and they increasingly turn to part-time work, which, though becoming more common, is an underdeveloped sector in Italy.