Inside Italy’s shadow economy
The implicit promise of fair labour practices when buying luxury labels is not being met, write Elizabeth Paton and Milena Lazazzera
IN a second-floor apartment in the southern Italian town of Santeramo in Colle, a middle-aged woman sat in a black-padded chair this summer, hard at work at her kitchen table. She carefully stitched a sophisticated woollen coat, the sort of style that will sell from 800 (about RM3,840) to 2,000 euros when it arrives in stores as part of the fall and winter collection of MaxMara, the Italian luxury fashion brand.
But the woman, who asked not to be named for fear that she could lose her livelihood, receives just one euro from the factory that employs her for each metre of fabric she completes.
“It takes me about one hour to sew one metre, so about four to five hours to complete an entire coat,” said the woman, who works without a contract, or insurance, and is paid in cash on a monthly basis. “I try to do two coats per day.”
The unregulated work she completes in her apartment is outsourced to her from a local factory that also manufactures outerwear for some of the best-known names in the luxury business, including Louis Vuitton and Fendi. The most she has ever earned, she said, was 24 euros for an entire coat.
Home work — working from home or a small workshop as opposed to in a factory — is a cornerstone of the fast-fashion supply chain. It is particularly prevalent in countries such as India, Bangladesh, Vietnam and China, where millions of low-paid and predominantly female homeworkers are some of the most unprotected in the industry, because of their irregular employment status, isolation and lack of legal recourse.
That similar conditions exist in Italy, however, and facilitate the production of some of the most expensive wardrobe items money can buy, may shock those who see the “Made in Italy” label as a byword for sophisticated craftsmanship.
Increased pressure from globalisation and growing competition at all levels of the market mean that the assumption implicit in the luxury promise — that part of the value of such a good is that it is made in the best conditions, by highly skilled workers, who are paid fairly — is at times put under threat.
Although they are not exposed to what most people would consider sweatshop conditions, the homeworkers are allotted what might seem close to sweatshop wages. Italy does not have a national minimum wage, but roughly five to seven euros per hour is considered an appropriate standard by many unions and consulting firms.
In extremely rare cases, a highly skilled worker can earn as much as 8 to 10 euros an hour. But the homeworkers earn significantly less, regardless of whether they are involved in leatherwork, embroidery or another artisanal task.
AT WHAT COST
The centuries-old foundations of the “Made in Italy” legend have been shaken in recent years by bureaucracy, rising costs and soaring unemployment.
Few sectors are as reliant on the country’s manufacturing cachet as the luxury trade, long a linchpin of Italy’s economic growth.
It is responsible for five per cent of Italian gross domestic product, and an estimated 500,000 people were employed directly and indirectly by the luxury goods sector in Italy last year, according to data from a report from the University of Bocconi and Altagamma, an Italian luxury trade organisation.
Those numbers have been bolstered by the rosy fortunes of the global luxury market, expected by Bain & Co. to grow by six to eight per cent, or 276 billion to 281 billion euros, this year — driven in part by the appetite for “Made in Italy” goods from established and emerging markets.
But the alleged efforts by some luxury brands and lead suppliers to lower costs without undermining quality have taken a toll on those operating at the very bottom of the industry. Just how many are affected is difficult to quantify.
According to data from the Italian National Institute of Statistics, 3.7 million workers across all sectors worked without contracts in Italy in 2015.
More recently, last year, the institute counted 7,216 homeworkers, 3,647 in the manufacturing sector, operating with regular contracts.
However, there is no official data on those operating with irregular contracts, and no one has attempted to quantify the group for decades.
This New York Times investigation collected evidence of about 60 women in the Puglia region alone working from home without a regular contract in the apparel sector.
Tania Toffanin, the author of Fabbriche Invisibili, a book on the history of homeworking in Italy, estimated that there are 2,000 to 4,000 irregular homeworkers in apparel production.
“The deeper down we go in the supply chain, the greater the abuse,” said Deborah Lucchetti, of Abiti Puliti, the Italian arm of Clean Clothes Campaign, an anti-sweatshop advocacy group.
According to Lucchetti, the fragmented structure of the global manufacturing sector, made up of thousands of medium to small, often family-owned, businesses, is a key reason that practices like unregulated homeworking can remain prevalent even in a First World nation like Italy.
Plenty of Puglian factory managers stressed they adhered to union regulations, treated workers fairly and paid them a living wage.
Many factory owners added that almost all luxury names — like Gucci, owned by Kering, for example, or Louis Vuitton, owned by LVMH Moet Hennessy Louis Vuitton — regularly sent staff to check on working conditions and quality standards.
When contacted, LVMH declined to comment for this story.
According to Lucchetti, the fact that many Italian luxury brands outsource the bulk of manufacturing, rather than use their own factories, has created a status quo where exploitation can easily fester — especially for those out of union or brand sightlines.
A large portion of brands hire a local supplier in a region, who will then negotiate contracts with factories in the area on their behalf.
INVISIBLE LABOUR
Homework textile jobs that are labour intensive or require skilled handiwork are not new to Italy.
But many industry observers believe that the lack of a government-set national minimum wage has made it easier for many homeworkers to still be paid a pittance.
Wages are generally negotiated for workers by union representatives, which vary by sector and by union. According to the Studio Rota Porta, an Italian labour consultancy, the minimum wage in the textile industry should be roughly 7.08 euros per hour, lower than those for other sectors including food (8.70), construction (8) and finance (11.51).
But workers who aren’t members of unions operate outside the system and are vulnerable to exploitation, a source of frustration for many union representatives.
“We do know about seamstresses working without contracts from home in Puglia, especially those that specialise in sewing applique, but none of them want to approach us to talk about their conditions, and the subcontracting keeps them largely invisible,” said Pietro Fiorella, a representative of the CGIL, or Italian General Confederation of Labour, the country’s largest national union.
Many of them are retired, Fiorella said, or want the flexibility of part-time work to care for family members or want to supplement their income, and are fearful of losing the additional money.
While unemployment rates in Puglia recently dropped to 19.5 per cent in the first quarter of this year from nearly 21.5 per cent in the same period a year ago, jobs remain difficult to come by.
A fellow union representative, Giordano Fumarola, pointed to another reason that garment and textile wages in this stretch of southern Italy have stayed so low for so long: the offshoring of production to Asia and Eastern Europe over the past two decades, which intensified local competition for fewer orders and forced factory owners to drive down prices.
For women like the unnamed seamstress in Santeramo in Colle, working away on yet another coat at her kitchen table, reform of any sort feels a long way off.
Not that she really minded. She would be devastated to lose this additional income, she said, and the work allowed her to spend time with her children.
“What do you want me to say?” she said with a sigh, closing her eyes and raising the palms of her hands. “It is what it is. This is Italy.”