Inside Italy’s Shadow Economy

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    I recently read [this article in the New York Times]( and thought it might be of interest to you all. It’s a few weeks old, so I apologize if it’s been posted before (I couldn’t find anything with a quick search).

    The article discusses how “Made in Italy” luxury brands contract out their work to Italian homeworkers, who make about 1 euro an hour or less. Here is a description of the work done by one such homeworker:

    >But the woman, who asked not to be named for fear that she could lose her livelihood, receives just €1 from the factory that employs her for each meter of fabric she completes.
    >“It takes me about one hour to sew one meter, 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 for an entire coat.

    And here is a description of how these exploitative conditions come about:

    >According to Ms. 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.
    >“Brands commission first lead contractors at the head of the supply chain, which then commission to sub-suppliers, which in turn shift part of the production to smaller factories under the pressure of reduced lead time and squeezed prices,” Ms. Lucchetti said. “That makes it very hard for there to be sufficient transparency or accountability. We know home working exists. But it is so hidden that there will be brands that have no idea orders are being made by irregular workers outside the contracted factories.”

    No doubt I’m too naive, but I found this article really shocking. There’s frequent discussion of how terrible fast fashion labor practices are, but I’ve always assumed that the high prices of luxury goods and the higher skill set required for their manufacture means that everyone in the supply chain is being paid fairly. Obviously this isn’t the case.





    My parents’ neighbor works in a factory where she makes leather jackets. It’s tough work and she gets paid a little over minimum wage. I used to go to her a lot to adjust my clothes and she was telling me how most of the leather jackets they do there are outsourced to Italy where they are sold at luxury prices. It really makes you think about luxury brands and how their clothes may look better, but hide the same unethical practices as the fast fashion stores we criticize so much :-/



    I think this sort of practice is deceptive by design. It parallels the “made in the USA” label which often means it’s made by underpaid prison workers. Both labels are supposed to trick us into thinking the good is both better made and more ethical so that we can shop without guilt and continue to be good, lucrative consumers. It’s frustrating that so few brands are truly transparent and unethical labour practices seem almost unescapable in the supply chain. Even thrifting has ethical concerns and bespoke clothing has supply chain concerns. It’s overwhelming to say the least.



    Name brand clothing is as bad or worse. I try to buy thrift shops or small local companies if I can. If one can afford big names, you’ll look even better if you hire a seamstress to make any clothing you can imagine! Why buy pricey garbage?



    Unfortunately it also seems part and parcel for the garment industry. Even over 100 years ago when clothing was made locally it was done mostly by e.g. immigrant women in New York’s garment district working extremely long hours in unsafe conditions, I wouldn’t be surprised if the luxury industry then too employed women at a pittance to sew all the embroidery and beading.



    [Related, interesting read about Chinese migrant workers in Tuscany](



    I was aware of exploration in poorer countries but had no idea this could also happen in Italy. It might be the first investigation of this sort.. Thanks!

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