Some German economists predict the next growth industry will be off the books
The volume of revenue in the underground economy - where money is exchanged for services without anyone paying the required taxes or social security contributions - is projected this year to sink to its lowest level in more than two decades, but then, is likely to rise.
That forecast comes from researchers at Tübingen's Institute for Applied Economic Research (IAW) and Austria's Johannes Kepler University in Linz, who believe the parallel economy will amount to 12.2 percent of Germany's GDP this year. Compared to other OECD countries, that puts Germany somewhere in the middle.
We're still (almost) No. 1!
The economic researchers also write that the United States has one of the smallest parallel economies relative to GDP - at a projected 6.2 percent for 2014. The reason for that is the lack of labor market regulations in the US as well as the generally low level of taxation, said Friedrich Schneider, a co-author of the IAW study....
Others are not even well off enough to play indoors;
Rounding out the bottom of the parallel economy rankings of more than 20 OECD countries is Greece in spite of the fact that business conducted outside state supervision has fallen there most in recent years. "The Greek economy has contracted so heavily, and income has fallen so sharply, that people cannot even afford illegal labor anymore," said Schneider.
(Bold by HSIB, of course.)
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