He is also an aspiring polyglot and has studied Spanish, Italian, Brazilian Portuguese, and Bosnian-Croatian-Serbian.
When people think of luxury brands, they expect that the products are quality, potentially involving a complex manufacturing process. Recently in Italy, the uncomfortable truth has been uncovered. Dior and Armani are in trouble with the Italian government over allegations of paying third parties who exploit immigrants to manufacture handbags. Immigrants are allegedly paid as little as 2-3 euros an hour, and both brands pay less than 100 euros to have each bag manufactured, a far cry from what many expect when paying thousands for a handbag. Dior bags with a retail price of 2,600 euros had a manufacturing cost of only 56 euros (excluding the cost of materials). While it is not a surprise that companies charge more for goods than it costs to produce them, it is still a shock regarding what a small percentage of the price of the bag is the manufacturing cost. This has also raised doubts about the quality of the bags and the possibility that consumers are simply paying a high amount for the brand name.
Armani and Dior did not directly exploit these workers, instead, they subcontracted the work to Chinese-owned firms based in Italy. The national government maintains that while this may be the case, it does not absolve either company from the responsibility of ensuring that workers involved with the manufacturing process are fairly treated. These firms prepared workers without a work visa to tell officials who conduct inspections of working conditions that they were actually not employed by the firms, despite evidence demonstrating that they in fact were working for the firm.
In order to ensure that the problems regarding working conditions are fully resolved, Dior and Armani will be placed under judicial administration. The Italian government is also concerned with ensuring that there is free competition in the market. When companies use illegal practices in order to produce goods at a cheaper price, this risks pushing out firms who follow the law and consequently earn less money. In a capitalist economy, companies are expected to compete, yet this becomes difficult to do so if the only way to compete is to break the law, as Dior and Armani have allegedly done.
Made In Italy Brand
Under Meloni, the Italian government has been working to protect the ‘Made in Italy’ label. The government also fined DR automobiles, an automaker based in the region of Molise for selling Chinese cars as Italian made. The automaker essentially sells Chinese cars with an Italian car brand badge attached to them. This is an issue as while consumers may have thought that they were buying an Italian made car, they were in reality buying Chinese cars as DR deceptively hid the origin of the vehicles. This could also damage the ‘Made in Italy’ brand if problems arose with the vehicles despite not actually being Italian. Products made in Italy are associated with high quality and the Italian government has an economic interest in protecting this reputation. In order to discourage this behaviour, the brand will have to pay a six million euro fine. Stellantis, the parent company of FIAT, no longer places the Italian flag on FIAT 600s which are produced in Poland after being accused of misleading consumers as well.
Protecting the integrity of products made in Italy is a priority of the Italian governance considering how important exports are for Italy. With over 500 billion euros worth of products exported every year, Italy is the six largest exporter worldwide. What helps Italian products be so well known worldwide are the four As, abbigliamento (clothing) arredamento (furniture), e automazione (machinery and transportation). Besides ensuring that companies do not abuse the ‘Made in Italy’ brand, the nation must figure out how to improve productivity, incentivize innovation, and reduce ant-industrialization sentiments in Italian society.
Italy’s Lack Of A National Minimum Wage
Source: Qery
While it may anger people to realize how little workers were allegedly paid to produce bags for Dior and Armani, the reality is that Italy will likely not be able to prosecute these brands for low pay. Instead, the national government will have to focus on poor working conditions. This is because Italy is one of the few European Union member states that does not yet have a minimum wage. While the extremely low hourly pay of 2-3 euros is being mentioned while reporting this story, it is unlikely that this will be a main point for holding Dior and Armani legally responsible for poor working conditions. Instead, this fact may help explain why these brands have partially been able to become so successful, compared to smaller brands.
Regardless of the absence of a minimum wage, bad working conditions were already discovered. Some workers were sleeping at the factories in order to produce handbags during the night. The government was also able to access documentation showing electricity consumption which proved that handbags were in fact being produced not only at night, but also during national holidays. Workers also were not provided protective eyeglasses in order to prevent fragments from damaging their eyes, along with exposure to dangerous machinery.
Conclusion
Nations need to ensure that companies do not exploit workers, regardless of citizenship status. Consumers also need to be more careful and realize that simply paying a higher price does not mean that a product was ethically produced. This is unfortunately not the first time that Italy has uncovered abhorrent working conditions, nor will it likely be the last. It is important to enforce legislation regarding worker rights not only to protect the workers which are actively being exploited, but to also protect the integrity of the economy and not allow companies which do not participate in these illegal practices to be forced out of the market. There is a significant risk that brands which treat employees fairly will struggle to compete with brands that do not, as they can sell their merchandise at a lower price.
Please Read The Following For More Information:
“Italy’s DR Automobiles fined 6 mln euros over Chinese-origin cars”. Reuters. 20 Jun 2024.
