Inside the Trillion-Dollar Underground Economy Keeping Many Americans (Barely) Afloat

[marmar]

AlterNet / By Sarah Jaffe

Inside the Trillion-Dollar Underground Economy Keeping Many Americans (Barely) Afloat in Desperate Times
The underground economy isn't just drugs and sex work--and it touches all of our lives.

September 16, 2011 |


The United States continues to suffer from mass unemployment, and people have had to adjust their lifestyles to the new reality—fewer jobs, lower wages, mortgages to pay that are now more than their homes are worth. Millions have dropped out of the job hunt and are trying to find other ways to sustain their families.

That's where the underground economy comes in. Also called the shadow or informal economy, it's not just illegal activity like selling drugs or doing sex work. It's all sorts of work that doesn't get regulated by the government or reported to the IRS, and it's a far bigger part of the economy than most of us are aware—in 2009, economics professor Friedrich Schneider estimated that it was nearly 8 percent of the US's GDP, somewhere around $1 trillion. (That makes the shadow GDP bigger than the entire GDP of Turkey or Austria.) Schneider doesn’t include illegal activities in his count-- he studies legal production of goods and services that are outside of tax and labor laws. And that shadow economy is growing as regular jobs continue to be hard to come by—Schneider estimated 5 percent in '09 alone.

The Young Women's Empowerment Project describes what they call the “street economy” as “... any way that girls make cash money without paying taxes or having to show identification. Sometimes this means the sex trade. But other times it means braiding hair, babysitting, selling CDs/DVDs, drugs or other skills like sewing and laundry.” ..............(more)

The complete piece is at: http://www.alternet.org/story/152446/inside_the_trillion-dollar_underground_economy_keeping_many_americans_%28barely%29_afloat_in_desperate_times/

[dkf]

1. Aka people getting around government regulations.

Why shouldn't an unemployed person be able to do the odd job for cash? If it were easier to do this legally, people would be surviving and would be productive instead of sitting on their butts for years trying to find a job.

[madrchsod]

2. my little city has had an average of 20 yard sales every week this summer

within a 15 mile radius it`s close to 60 per week.

[marmar]

3. Yep. I have NEVER seen so many yard sales as I have in recent years.

nt

[DCKit]

4. Lots of people have developed a business model...

of going to other peoples yard sales, haggling for the best stuff, then reselling at their own yard sale.

[xchrom]

5. Recommend

[CanonRay]

6. Headline tomorrow: "IRS to Crackdown on Illegal Haribraiders"

cuz you know we don't want to go after those offshore trillions.