Analysis. The latest report from ISTAT shows sharpening inequality, with most of the benefits of economic growth going to those who are already financially stable. Those most at risk of poverty are southerners, foreigners and people with large families.

One in five Italians live on less than €842 per month

The wealthiest households in Italy have an income six times higher than that of the poorest households. The percentage of the population at risk of poverty or social exclusion has decreased, due to a lower percentage of situations of severe material deprivation, but the percentage of those at risk of poverty remains stable (i.e. those who are working but cannot make ends meet with their wages alone). About 12 million people (20.3% of the population) have a net income of less than €10,106 per year (€842 per month).

This is the situation the Italian statistics office ISTAT describes in a new report on the living conditions, income and tax burden of Italian families published this week. Inequality is not decreasing, while most of the wealth is distributed among those who already have a solid financial situation and who tend to improve their condition. 

The line of this social divide doesn’t just map out to the different classes, but the different territories as well. It confirms once again the historical Italian inequalities: the South, with the smallest average yearly income of all Italian regions, at €29,398 (compared to €36,293 for Italian residents overall), also has the highest level of inequality, while the Northeast (with an average income of €41,019) has the lowest inequality. Specifically, it is in the poorer regions that poverty and social exclusion are getting worse, as the percentage of people at risk has climbed from 33.1% in 2017 to 34.4% in 2018.

Conversely, the lowest proportion of people at risk of poverty was recorded in the Northeast, with 14.6%, while the most visible fall in the risk of poverty was seen in the Northwest (from 20.7% in 2017 to 16.8% in 2018), particularly with regard to conditions of material deprivation. An improvement in this regard also occurred in the Northeast (from 16.1% to 14.6%) and in the Center (from 25.3% down to 23.1%). 

Overall, the poorest families are those with three or more children (36%), followed by single parent households. In general, the decrease in household income in real terms is higher for larger households, while it is much smaller for two-member households.

Those who live in families with at least one foreign citizen have a significantly higher risk of poverty or social exclusion (42.7%) than those who live in families composed only of Italians (25.5%). The gap is even more marked for families including foreigners, both in terms of the risk of poverty (36.2%, compared to 18.4% for families of Italians alone) and the risk of serious material deprivation (16.1% compared to 7.6%), while, on the other hand, the proportion of people with a low employment rate is less than half among individuals in families with at least one foreigner (6.8% compared to 12% for families made up of Italians alone). 

Despite the growth recorded up to 2017, incomes are still significantly lower than in 2007, the year before the crisis. Household incomes have lost an average of 8.8% in real terms. In the South, the average income is 11.9% lower than the pre-crisis level, while the same figure is 11% in the Center, 6.7% in the Northwest and 6% in the Northeast.

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