with 500,000 falling off unemployment rolls per/month are they joining underground economy?
USA has 300 million people, about 160 million adult households. Half a million every month fall off the unemployment statistics. Where are they going? The underground economy has always been equal to about 25% of GDP (gross domestic product). Is it growing? Are more and more Americans finding Freedom off the books? Is this one of the Revolutions which will not be televised?
- 8 years agoBest Answer
Stossel is likely to cover that issue one of these days but how is he going to find anybody to admit it? I found figures on the estimated underground economy that consistently stated it is in the range of $2 trillion per year. That does not include the illegal activities like prostitution, drugs, etc. They won't even throw a figure out there. That has to be huge. I also read that 12-15 million illegals are working by being paid under the table.
I also believe many people who lost their jobs that fall into the ending of the 99 week unemployment range would be near retirement age and may be on SSI. The boomers are just beginning to hit that age. My neighbor started a business when both he and his wife lost their jobs. He does quality testing for an automotive plant in town. They actually outsourced to someone in town. He seems to be doing alright but don't know if he has health insurance, etc. He has a couple of employees who come and do his yard work during slow times. Some people are able to figure things out eventually.
- AmirahLv 44 years ago
I believe a lot of people who have lost their jobs were close to retirement age. This would represent the first wave of boomers retiring and that would be a huge number of people. A lot more people who had mom and pop businesses will never show up in the unemployment numbers. You can't collect unemployment if your business fails. Ours failed in the 80's during that deep recession and many people in my community had the same problem and ended up selling their property although at a big loss. This is especially true in the construction area when there is little to no building going on. That may tide people over for a couple of years but when it drags on for more than 2 years, people will become more and more self sufficient if they have land, storage space, a network of people, etc. I can tell you that around my area the choices in jobs are not there. Delivering pizza and cleaning bathrooms won't keep a roof over your head unless you own the business and under bid somebody else. Some facilities even discontinue their cleaning service and have the regular employees clean instead and the major chain local pizza parlor in my little town just closed their doors last week. The truck stop sold pizza much cheaper and is almost as good.
- Anonymous8 years ago
Well, if you just make up numbers like the false claim that 500,000 are dropping out of unemployment benefits every month, I guess the answer is whatever you want it to be. For 2011 the average drop in state UI continuing claims has been just under 6,000 a week. Not even close to your bogus 500,000. Now if you're talking about total unemployment (there are no "rolls" for that since it's not a list) the unemployed become employed, or stop looking for work (or die, join the military, go to jail, leave the country etc). "Underground economy" would still be counted as employed if that's what they report in the survey.
And seriously, you think the underground economy is 25% of GDP? Where'd you get that from?
- ?Lv 68 years ago
Since the housing bubble burst, I have seen my competition more than triple. More competition isn't always a bad thing. But they are jumping into a drying pool of money, and fouling the pool with shoddy craftsmanship, and shady business practices.
It's hard to land residential handyman work, for the simple fact that there are guys out there charging less than a third of what I charge. I still land the bigger better paying jobs because I am licensed, insured, and have a proven track record. But the little half day jobs have too small a profit margin. Unless the homeowner has already been burned by a hack, I don't get those jobs.
I see too many trucks with poster board duct taped to the tailgate. The worst part about these fly by night outfits is they do shoddy work. They want cash upfront, then disappear. They install tiles directly to the linoleum. They burn holes into the copper pipe they were supposed to be repairing. They duct tape sewer lines (no seriously, I've seen it), they contract to rebuild rotten windows and bondo the sill, instead of replacing it. They use PVC pipe to run natural gas (no, seriously). They use yellow pine on exterior work. They use Wal-Mart paint, while charging for high end paint.
There was one guy here in Atlanta, who did handyman service as a pretense to case your house. He would fix your toilet, and unlock a window on his way out. You come home from work the next day, and all your pawnable stuff is gone.
I have seen some crap, that would get your @ss kicked if you tried it at my house.
A few homeowners I've met, have carded me before we even talk price. Uninsured fly by night guys are losing digits on the job, and the homeowner's insurance has to pick up the tab. But these people are happy to pay my price, for the simple fact that I am legitimate.
The entrepreneurial spirit is a good thing. But these guys are not entrepreneurs, they are just desperate, hacks, and lowlifes. And I'll be glad for them to return to their factory work, if this recession ever ends...
- How do you think about the answers? You can sign in to vote the answer.
- tott1Lv 58 years ago
there has always been an underground economy. and it would be great in a way if the unemployed american citizens pushed the illegals out of it , maybe this is a way of reducing the immigration problem if we take up all the off the books work away from them. to harvey just a note many times i have repaired the work of ligetimate auto shops and dealership service departments in my home shop. not all off the books work is done poorly.
- tcoyoteLv 48 years ago
I must admit I've always been a bit suspicious of the numbers that are published. Those folks just do not disappear. I suspect that as we are forced to move from an era of the central mass of our economy being motivated by industrial and governmental direction, to an era more locally and regionally based, those who do the counting will finally have to change the way that they count bodies.
- ms.Lv 78 years ago
some start collecting social security, some just go broke...
I don't think the bulk of Americans can figure out how to make a living "off the books" especially if they don't have any skills or ideas and even if they do they need money to start up their trade and can't come up with it.
@Harvey, yeah, keep up the good work! when I first bought my home in 2001 I needed a plumber who tried to rip me off by not sticking to the problem I hired him to fix in the first place, he kept saying I had all these other problems that needed fixed and I had to keep a close eye on him to prevent him from charging up hours of work for just "looking around"... it's difficult to find good, honest help sometimes.
- 8 years ago
Many of them are simple taking crappy low paying jobs just to get by. Another thing that is happening is people are moving in together to cut costs. Families are getting closer again.
- Michael MartinezLv 58 years ago
There's lots of that going on, I sympathize with LTM but as for the government not getting their taxes; well F them
- joe the manLv 78 years ago
it happens in a lot of societies in crisis. in africa and parts of asia most of the non industrial economy is "grey"