New Straits Times

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

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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.”

 ??  ?? A sewing thimble and a black thread spool used for the fall fashion collection­s in the Puglia region of Italy.
A sewing thimble and a black thread spool used for the fall fashion collection­s in the Puglia region of Italy.

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