Trader Talk

Italy, Emilia-Romagna, Bologna, People walking along narrow cobbled street lined with food shops
Gary Yeowell | Stone | Getty Images

RIMINI, ITALY — The seaside town of Rimini is the Jersey Shore of Italy: From here to the port town of Ancona in the southeast, there are more than 40 miles of sandy beaches. 

It was made famous by native son Federico Fellini, who grow up in the town and featured it in several of his movies, including Amarcord

The region, Emilia-Romagna,  is synonymous with Italy’s greatest export: La Dolce Vita, the good life of wine, food, good-looking people and fast cars. 

You can see la dolce vita the minute you hit the beach: the obvious first thing is the beach bars, hundreds of them, where thousands — wearing as little as possible — wash down oceans of Aperol spritzes, Negronis and Italian white wine for 5 euros ($5.35) a glass. 

Then there’s the food, which has made this region one of the foodie capitals of Europe. 

People flock to the cities of Parma, Modena, Bologna, Ravenna and Rimini to eat the Parma ham (prosciutto), the cheese (Parmesan, of course) and the pasta in endless varieties, but particularly tagliatelle, tortellini and lasagna, all made by hand. 

It’s also the industrial heart of Italy, where Ferraris, Maseratis and Lamborghinis are made. 

The Jersey Shore, but not 

Unlike Americans, Italians do not just plunk down their beach bag and dive in the ocean. 

The Italians have constructed small cities on their beaches, and there is a protocol. 

Here, you rent a beach chair and umbrella from the cabana boys. The chairs and umbrellas are arranged in neat rows, nearly three dozen of them, all numbered, that stretch all the way to the Adriatic Sea nearly a quarter mile from the street. 

And it is the Adriatic that everyone comes for. It separates the Italian peninsula from Croatia and Albania 100 miles to the east. Like the Atlantic, the Adriatic lacks the clear blue water of the Mediterranean, but what it lacks in color it makes up for in temperature (already 67 degrees), calmness and accessibility (Bologna is less than an hour away). 

With so much money, so much sun, so much water, and so much food and wine, you’d think life would be an endless party, but the Italians do not seem very happy these days, and with good reason. 

A bargain for Americans, but not for Italians 

Italy is heavily reliant on tourism. More than 2 million Italians are employed in the tourist industry, about 8% of total employment. 

The good news: the tourist business is booming. 

Business has been “crazy good,” one taxi driver in Bologna told me: ”Since Covid, it has not stopped. Not even in winter. Tourists keep coming.” 

A gondolier in Venice, an hour to the north, told me that all 433 gondoliers in Venice were working full-time, even through the winter. 

“The business of the gondoliers has been very good in the last year,” he told me, even as he charged 120 euros (about $130) for a 45-minute gondola ride in the narrow, watery canals behind St. Mark’s square. 

That ocean of tourists is greatly helped by the presence of Americans. While Europeans, particularly French and Germans, make up the largest group of foreign visitors, Americans do something their European brethren don’t: They tip really well. 

“We love Americans,” one waiter in Modena said to me after I left him a 10% tip for exceptional service

For Americans, Europe in general but the smaller cities of Italy in particular are a great value. At one point last year the dollar was on a par with the euro. Even today, with one euro roughly $1.07, the continent’s still a relative bargain. 

Prices will be higher in the summer high season, but right now you can get a good hotel room within walking distance of the beach in Rimini for 100-200 euros ($107-$214).  At the famous Grand Hotel Rimini, built in 1908 and the site of several Fellini movies, you can mingle at the famous pool or the hotel’s private beach for $200-$400 a night, depending on the day of the week. 

On the beach, at the Il Circolino restaurant, you can get a pasta course (tagliatelle al ragu —it’s amazing) for 12 euros ($13) and main dishes like chicken or seafood like polpo (octopus) for 15 to 22 euros ($16-$24).  

These are the high-end places. 

It’s a bargain for Americans but, for most Italians, even those prices are out of reach. 

“Business is good on Thursday, Friday and Saturday, but so much depends on tourists,” the manager of one restaurant told me. 

The problem, he said, is that the good life made famous by Fellini is increasingly out of reach for ordinary Italians. 

It’s all about the taxes

“The average Italian here makes about 20,000 euros a year [$21,400],” he told me. He’s likely talking about those working in the service industry. An average salary in Italy in 2021 was about 29,000 euros (about $31,000), according to OECD statistics. That’s still below the European Union average of about 33,000 euros. 

But his face really soured when he started talking about the issue that unites every Italian: taxes. 

They are high. Very high. Italians pay three taxes: national income tax (including a 9.2% social security contribution), regional taxes and municipal taxes. The income tax rate is progressive: The top rate for the income tax is 43% — higher than the European average of 38%. 

“If an Italian pays all of their taxes they could pay over half their income to the government,” the manager said as he clasped his hands together and rocked them back and forth, Italian for “I can’t believe we’re paying this much.” 

No wonder so many salaries are paid under the table. Italy has a famous black market economy. 

What’s left to live on is the problem. Rents in Rimini are 550-650 euros (about $590-$700) a month for a tiny one-bedroom apartment. That is about 40% of the take-home pay for one of the manager’s employees. 

It’s little wonder that 62% of young Italians (25-29) still live with their parents. 

Smaller wonder still that even a 12-euro plate of pasta can feel a bit extravagant. 

No surprise, too, that the manager said the business increasingly relies on wealthier Germans, Brits, and Americans. 

“For Americans, Italy is wonderful, but for an Italian to visit America, it’s impossible,” he said. 

Italians are leaving in search of opportunities 

High taxes. Low average incomes. High inflation (8% a year). 

Life has gotten difficult enough that many young Italians are continuing to leave Italy in search of opportunities elsewhere. 

Five million Italians are now living overseas. 

Another major motivation: lack of job growth. 

I had lunch with one family, a woman and her two children, in Padua, a university city about an hour northwest of Rimini. Both children, ages 24 and 31, live at home with their mother. 

The oldest has been working in Denmark for the past few years, for a software company. He has been visiting his family, but was going back to Denmark that week. His sister, who worked for a year in the U.S., is getting her degree in architecture in Venice, but admits she may want to go abroad to finish her studies. 

“I think it would be better to go abroad, to get more experience, and maybe better job offers,” she told me. 

The bottom line: Italy’s greatest export, la dolce vita, is still alive and well. The sun, the wine, the food, the fantastic people, are all still here. 

It’s just getting a little more difficult for the locals to partake in that great export.

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