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

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The United States continues to suffer from mass unemployment. 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 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 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.

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About Giorgio Bertini

Director at Learning Change Project - Research on society, culture, art, neuroscience, cognition, critical thinking, intelligence, creativity, autopoiesis, self-organization, rhizomes, complexity, systems, networks, leadership, sustainability, thinkers, futures ++
This entry was posted in Crisis, Underground economy, United States and tagged , , . Bookmark the permalink.

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