German Shadow Economy Shrinking
World Economy

German Shadow Economy Shrinking

Black market employers in Germany are facing hard times, a new study has found, because better-paid legal work has been shrinking the ranks of those forced into untaxed, cash-in-hand jobs.
According to a study released by Germany’s Institute for Applied Economic Research on Tuesday, the number of people working illicitly is likely to decrease further this year due to higher job creation in Germany, DW reported.
In 2016, moonlighting was expected to fall by 0.4% to 10.8% of Germany’s gross domestic product, the Tubingen-based researchers said, thus reducing estimated illegal revenues by €3.35 billion ($3.65 billion) to a total of €336 billion.

  Uncertainty Over Refugees
Germany’s black labor market, however, remains big business despite its decline over the past six years. Since first official records were taken in 1995, illicit employment has peaked twice, namely during the economic crisis at the turn of the millenum and the financial crisis of 2007/2008.
In 2003, the shadow economy generated illegal revenue of €370 billion, or 16.7% of GDP, while the figure came in at €352 billion, or 14.3% in 2009.
The IAW report, which was compiled with the collaboration of researchers from Austria’s University of Linz, noted, however, that uncertainty would remain about the affects of migrants seeking work in the German shadow economy.
In the face of an influx of more than a million refugees to Germany last year, the researchers estimate that up to 300,000 migrants might end up being employed illegally in 2016, for example, as cleaners or in the construction sector. Pointing out that asylum-seekers often have to wait many months until they are allowed to work, Schneider said: “They want to get out at some point and go into the illegal job market.”

  Shadow Economy Ranking
The economic researchers also wrote that the United States had one of the smallest parallel economies relative to GDP–at a projected 5.6% for 2016.
The reason for that is the lack of labor market regulations in the US as well as the generally low level of taxation, said Schneider, adding that “the incentive to work under the table there does exist in the agricultural sector and among immigrants.”
Rounding out the bottom of the parallel economy rankings of more than 20 OECD countries is Greece with 22%, or one in every five euros earned illegally. Surprisingly, Italy and Spain–Europe’s third and fourth largest economies–come hard on the heels of Greece with illegal work making up 20.2% and 17.9% of GDP respectively.




Short URL : http://goo.gl/zGyYAT
  1. http://goo.gl/F0qDFX
  • http://goo.gl/1FYBXh
  • http://goo.gl/IkS71d
  • http://goo.gl/Yx94Fi
  • http://goo.gl/BgFmyV

You can also read ...

Transnational organized crime is involved in all forms of illicit trade, from human trafficking networks and tobacco smuggling, to trade of counterfeit goods.
Illicit trade in any of its forms—tobacco, pharmaceuticals,...
The vast majority of US businesses are pass-throughs, including those owned by President Donald Trump.
The US' Congressional Budget Office warned earlier this month...
Curing existing patients also decreases the number of carriers able to transmit the virus to new patients.
Goldman Sachs has outdone itself this time. That’s saying a...
The accumulation of bankruptcy cases means that  it sometimes takes about six months just to get  a new insolvency case admitted to court.
India’s revamped bankruptcy process is in full swing and...
Finland’s Nordea Bank Predicts Growth to Stagnate After 2020
Finnish economic growth is set to keep its strong path this...
Argentina Gets 32 Road Project Bids
Argentina says it received 32 bids for six road projects...
Swiss Investor Confidence Weakest Since Late 2016
Switzerland’s investor confidence deteriorated further in...
South Africa CCI at All Time High
Consumer confidence in South Africa touched an all-time high...