The Underground Economy

The "Underground Economy" is a term used for the system where workers who can't find a full-time or regular job are paid under the table. The services they are getting paid for are not always illegal however. Anecdotal evidence shows that the system applies to personal and domestic workers such as housekeepers and nannies. This system is a double edged sword however, it can be beneficial while at the same time it can be problematic. On the beneficial side is the fact that there is a surge in consumer spending, consequently boosting the economy. This system also gives those who have a hard time finding a job in the current economy a chance to work, maybe not for much, but at least for something. On the negative side however, workers who are paid under the table are not taxed. According to the International Revenue Service, over $500 billion in taxes were lost due to unreported wages. There is also the strong likelihood that workers who are forced to work in these conditions will be exploited by businesses.