Will the underground economy increase if official unemployment increases?

Although the measurement of the actual extent of the underground economy is still inaccurate science, many economists believe that there is a tangible connection between the unemployment rate in the above ground economy and the subsequent increase or decrease in the underground economy. Basically, when the official unemployment data increases significantly in the legitimate economy, the result is a larger fund of undocumented workers who are available for jobs in the underground economy. It is often a matter of financial survival for a particular segment of the population that is not entitled to compensation for unemployment or other legitimate forms of help.

The rules governing employment in the above -ground economy can make employers more difficult to avoid dismissal, reduction and hiring. There are a number of marginal costs that must be absorbed to the employer except for the actual wages paid by workers. Even an unskilled worker earning a minimum wage in the United States could cost compace twice tOlik from tax obligations, benefits of employees and other expenditures related to the above -ground economy. In fact, there are not many jobs made by these unqualified or partially qualified workers in proportion to the amount of money that requires it to maintain it on the payroll of the company. This is one of the reasons why the official unemployment rates may increase, as smaller companies often clean up workers from their paycheck to save production costs.

The underground economy plays the main role in the fate of unemployed or seemingly unemployed workers. Businesses working in the underground economy are not managed by the same financial and ethical rules as enterprises working in the legitimate economy. Earning for a living in an underground economy is often based on productivity or personal ambition, not just the designation of time on the factory floor. Workers consideredNon -qualified semi -discharge in the above country could find itself in an underground economy if they are willing to perform illegal or illegal cash tasks.

When the legitimate economy increases the unemployment rate, it unintentionally creates a subculture of people who have disappointed or discouraged from disillusionment or discouraged by lack of decent jobs. Unfortunately, their basic financial and personal needs have not changed, so much will be looking for a job under the table or become self -employed in illegal professions such as prostitution, gambling or drug sales. Although the legitimate economy should regain its strength, some of these workers in the underground economy will not return to the above -mentioned ground labor. Either they feel that they are more successful in their illegal career or no longer have skills or work ethics sought by legitimate employers.

It could be said that a substantial increaseE opposite in the underground economy, but there is still a hope that many of these displaced workers will return to a legitimate labor force as soon as the initial attraction of the underground economy passes.