Italy's employment rate fell to its lowest in 14 years in the first quarter of 2009 amid the global economic turmoil, local media reported.
The unemployment rate has almost reached 8 percent, meaning 2 million people are jobless, according to a report released on Friday by the national statistics bureau Istat.
The global financial crisis caused more than 204,000 Italians to lose their jobs in the first three months of 2009, said the report.
The shrinking job market hit hard the southern part of the country, where people are less better-off and jobless rates are higher.
Italy's industrial production has plummeted, leading to a sharp fall in employment rate, though the country is faring better than other European countries in the global credit crunch.
According to Istat, the lost jobs were all 'independent' non-salaried positions held by Italian artisans, traders and manufacturers.
Many small and medium enterprises have been forced to lay off workers to cut costs and survive the financial crisis.
More than 245,000 workers have been temporarily sent home on reduced pay using a redundancy funds jointly paid by employers and the government. Last year the number of redundant workers reached 61,000.
In Italy, small and medium businesses make up nearly 90 percent of the industrial sector.
Istat said the total number of jobs in the country decreased as jobs in the industrial sector dropped by 1.6 percent and service sector by 0.8 percent.
The only sector seeing a job increase was construction, up 1.7 percent in the first quarter, while in agriculture the number of jobs fell by 3.4 percent.
As people under 34 account for nearly 50 percent of the total in the first quarter of 2009, they encounter greater obstacles when entering the labor market. As late comers, they do not have the protection of safety nets such as redundancy funds and are more vulnerable to the economic recession.
The scenario will get even worse in coming months. Confindustria, an Italian association of entrepreneurs, forecast a 2.7 percent drop in the number of employed people in 2009 and a further 0.6 percent decline in 2010, reported the financial newspaper Il Sole 24 Ore.
Confindustria also forecast that between 2008 and 2010 the recession will cost 1 million more jobs.
The big loss in the number of jobs is closely linked to a fall in production. The Italian GDP is expected to shrink by 5 percent in 2009, said Confindustria.
On Wednesday, the Organization for Economic Cooperation and Development (OECD) issued even gloomier figures, estimating the Italian unemployment rate at about 10 percent in 2009, below the eurozone average.
Some Italian economists said the impacts of the financial crisis will be felt on production and employment, reducing purchasing power and domestic consumption.
However, other analysts said the worst of the financial turmoil had passed and the country is heading towards an economic recovery. Companies are starting to invest again in brands and innovation.
To boost economic revival, the Welfare Ministry is considering introducing special unemployment benefits for enterprises to avoid cutting jobs or reabsorb redundant workers.
Welfare Minister Maurizio Sacconi told local media that Istat's data are better than what the government had predicted, meaning the unemployment benefits initiated recently had proved to be a success.
Source:Xinhua
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