Sunday, August 1, 2021

What my daughter is learning in Rome

We have blogged about the labor market problems in Italy before:

This is why Southern Europe is a mess
Look ahead and reason back:  Italy
If you can measure absenteeism, you can control it

But I never realized how bad it was until I received this e mail from my daughter who is studying in Rome this summer:
Today, in my global practicum class we had a speaker who owns several McDonald's franchises in Rome and he enlightened us on the troubles of being an employer in Italy

First of all, he said, all employees who are hired, are hired for life.
They are allotted 6 weeks of paid vacation per year-- even working at Mcdonald's!!!

Each employer must pay a 100 percent tax of what he pays to the employee to the government.

Each employee has a 6 month paid sick leave per year that they can take with a valid doctors note. (which many tend to pull off with ease)

Employees are not allowed to be fired for poor behavior or work ethic, only if they steal or destroy company property.
If the employee is fired and sues the employer, the case is taken to civil court.  Most of these cases can take up to 3 years to be processed, 90% of the time the judge rules in favor of the employee and then the employer must pay 15 months salary for firing them, pay the salary they would have earned during the three years it took the case to be processed, and then must rehire the employee.

So basically no one wants to own or start a business in Italy, but everyone wants a freaking job.

Feel free to forward this to father, I am sure he would be interested, and I thought America was corrupt.
Her semester abroad seems like money well spent. 


  1. Not all countries can be like the United States or most of the Asian countries. During the 60s and 70s these labor features were common in Spain and certain South American countries, after the different crises in the 80s and 90s, the working conditions were modified with the objectives of making corporations more competitive in international markets.
    I understand that employees should enjoy working conditions, but when a State becomes very protective, they eliminated competitive opportunities from companies as well as with their employees. Thin in turn reduces and/or eliminates the healthy part of the competition between individuals and corporations.
    The feeling of security or tenure tends to produce levels of decrease in production, since the incentive for the conservation of the post, produces in individuals the need to generate high levels of performances in their positions, so that they can keep their positions as well as some types of economics rewards.
    In extreme cases (work safety, and job insecurity) tend to generate levels of no incentive in the working population as well as reductions in yield, both would prevent for the workforce to concentrate on raising levels of production, as well as the quality of the product.

    References: Froeb, McCann, Ward, Shor: (2014) Managerial Econonics. A Problem Solving Approach, Ohio: South Western Cengage Learning


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  2. I respectfully disagree with this writer’s opinion of Italy’s employment labor laws. I would like to work in Italy. Why not? Why can’t someone who is really ill take off for six months? What if your family member had cancer with chemotherapy? I know I would want to see them be able to retain their job in the hopes that they will pull through. The way the article represented workers in Italy is that all McDonald’s employees take six months off each year. I sincerely doubt this is the case. I am sure that number is grossly exaggerated. Even if one percent of the workers did take off six months a year. I am sure these workers are headed for retirement anyway. In addition, one percent of the population is not going to bankrupt McDonald’s or any other business for that matter.

    I know, that when I personally see a doctor – they are extremely cheap with giving days off, so I cannot accept this article’s bias.
    The writer of this article is also trying to make it seem like taking six weeks off for paid vacation is something close to a crime? I am sure the writer of the article may get close to four weeks off, and I am sure would love to have two more. If my employer ever wanted to reward me all they have to do is either give me more money or more days off. I don’t want anything else from my employer. I do not want the awards, recognition, or the kudos. I want the money or the time off.
    What employee wouldn’t love to be able to hired for life. Sounds like I will be making plans to move there soon!!!! Poor work ethic - isn’t that a basis of opinion. A culture difference most of the time. People need to be more human and humane and stop turning everyone into robots, and disposable toilet tissue. People deserve to retained on the job. America is the one with outrageous labor laws. All of Europe, not just Italy, has a better quality of life than Americans. If Americans can see how the other half lives, they would be able to see how we are truly on the losing side of better quality of life.

  3. As an Italian qualified lawyer I can say that the description is pretty accurate, but there is another side of the story.

    The vast majority of businesses in Italy are family owned. The family hires family members and puts them in key positions to oversee different operations even if they are not qualified for the job.

    Moreover family members' behavior at work can be extremely disrespectful and abusive with the other employees because they know that employees are unlikely to quit their jobs (who would, given that it is very difficult to be hired again, and the unemployment rate is through the roof in comparison to US figures).

    Also Italian businesses' competitive advantage is not on big scale industries but in highly specialized high value niche industries (e.g. luxury). This means that job skills build over decades of work through the ranks of a company are often not transferrable and even if they are the competitor looking to hire the lied-off employee is located in another geographic area which means the employee cannot commute but must relocate (for other reasons this is highly unpracticable).

    Basically, if an employee owns an house and has a mortgage (for cultural reasons everyone who can get a loan will own a house) her/his life/future/family/social status depends on the employer (same reason as before).

    In short the rules criticized above are there to keep the social fabric from collapsing. That does not mean they cannot be improved though.

    Your money is well spend for your daughters' semester abroad, if it teaches her to analyze situations taking into account a framework other than that of the US.

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