The Black Economy - Cause or Cure for Poverty ?

[C. Flower]

Greeks and Italians talk here about how its impossible not to get sucked in to the black economy.

In Ireland, the black economy appeared to wane as people had more money to spare. Now, on the bread line, people are resorting to cash transactions as they need every cent they can lay their hands on.

Is the black economy a product of poverty, or a contributory cause ?

http://www.guardian.co.uk/world/blog/2011/oct/21/europe-breadline-blame-culture-corruption?CMP=twt_gu

[fluffybiscuits]

Greeks and Italians talk here about how its impossible not to get sucked in to the black economy.

In Ireland, the black economy appeared to wane as people had more money to spare. Now, on the bread line, people are resorting to cash transactions as they need every cent they can lay their hands on.

Is the black economy a product of poverty, or a contributory cause ?

http://www.guardian.co.uk/world/blog/2011/oct/21/europe-breadline-blame-culture-corruption?CMP=twt_gu

There is a sense of cronyism and its still prevalent even today in the public sector and its as bad as it ever was. There is little cliques in the public sector and we know who is going to get the jobs. Im gong to horizontal transfer as a result of it as I have identifed a few opportunities where there may be room to move up the ladder slightly.There was one thing that article mentioned that caught my eye that could mean a solution for here .

One of the main problems is here we are expected to buy a house, its almost like a status symbol and I believed for a while that it was necessary to but now Im not so sure , Im quite happy renting. Because people were not saddled with the debt of a mortgage in places like Spain and Italy where renting is more par for the norm here things are more difficult as people have a mortgage like a noose around their neck. We should encourage people to perhaps rent more or look at more ways of long term leases.

The black economy is both bad and good , it works two ways, it provides a means of access to products and services where people may not be able to afford them. On the other hand it may undercut genuine businesses whom are employing people...

[Andrew49]

Greeks and Italians talk here about how its impossible not to get sucked in to the black economy.

In Ireland, the black economy appeared to wane as people had more money to spare. Now, on the bread line, people are resorting to cash transactions as they need every cent they can lay their hands on.

Is the black economy a product of poverty, or a contributory cause ?

http://www.guardian.co.uk/world/blog/2011/oct/21/europe-breadline-blame-culture-corruption?CMP=twt_gu


I think it's both.

It undercuts wages - so increases poverty particularly of low-income workers and their families.

Those people depending on jobs in the black economy have no employment rights or protection.

It reduces State revenue and so public services (health, education) are affected.

Good read here on the subject.

Countries that are transitioning from one economic state to another (transition countries) and developing countries have claimed that a large part of economic activities were done within the shadow economy (Dreher & Schneider, 2006; Pickhardt & Sarda-Pous, 2006; Schneider, 2007; Tunyan, 2005).

In applying the estimation techniques for measuring shadow economy for the period 1995–2000, the results indicated the size of shadow activities to be 35–44% of GDP for developing economies, 21–30% of GDP for the countries transiting from communist to capitalist economy (transition economies) and 14–16% of GDP for the Organisation for Economic Co-operation and Development (OECD) economies (advance economies (Amar, 2004; Elijah & Uffort, 2007).

The value of the shadow economy grew from about 7.9% of GDP in 1976 to about 16% in 2001 (Choi & Thum, 2005; Tedds, 2005). The shadow economy was considered by many studies to inhibit development in developing countries and to have eroded the existing welfare state in the developed countries. Underground economies also have a significant long-term negative effect on the generation of societal wealth (De Soto, 2005; Dreher & Schneider, 2006; Feige & Urban, 2008; Nikopour, Habibullah, & Schneider, 2008).

Shadow Economy and the Related Issues of Tax Evasion: Comparative Analysis among Canadian Workers (http://business.usi.edu/mbea/2011/01-fogel-2011.pdf)

[sinsin]

Louisiana.
House bill 195 basically says those who buy and sell second hand goods cannot use cash to make those transactions.
Our gobdaws will be the first to follow.:rolleyes:

http://www.klfy.com/story/15717759/second-hand-dealer-law

http://www.liveleak.com/view?i=139_1319078637

[TotalMayhem]

I see only significant positive effects. My plumber for example is only charging 30% of what he used to take 3 years ago and no unnecessary delays anymore. Whether or not he's bailing out the banks paying taxes, I don't know and I frankly do not care.

[sinsin]

I see only significant positive effects. My plumber for example is only charging 30% of what he used to take 3 years ago and no unnecessary delays anymore. Whether or not he's bailing out the banks paying taxes, I don't know and I frankly do not care.

:)

[Captain Con O'Sullivan]

The black economy is always the real economy. The 'legit' economy is always the fake.

[morticia]

Barter economies predate the modern type by millenia. Doubt they'll ever wipe 'em out...

[Apjp]

There is a sense of cronyism and its still prevalent even today in the public sector and its as bad as it ever was. There is little cliques in the public sector and we know who is going to get the jobs. Im gong to horizontal transfer as a result of it as I have identifed a few opportunities where there may be room to move up the ladder slightly.There was one thing that article mentioned that caught my eye that could mean a solution for here .

One of the main problems is here we are expected to buy a house, its almost like a status symbol and I believed for a while that it was necessary to but now Im not so sure , Im quite happy renting. Because people were not saddled with the debt of a mortgage in places like Spain and Italy where renting is more par for the norm here things are more difficult as people have a mortgage like a noose around their neck. We should encourage people to perhaps rent more or look at more ways of long term leases.

The black economy is both bad and good , it works two ways, it provides a means of access to products and services where people may not be able to afford them. On the other hand it may undercut genuine businesses whom are employing people...

anyone who thinks any part of europe didnt undergo a mad housing boom like ireland in the last ten years needs to cop on or get the facts. Spain was the epicentre of it all. Italy was almost equally huge-in fact it has even more debt which is all that matters regardless of who was more stupid in the property market. It was a GLOBAL thing. Ahem subprimes.

[bormotello]

Greeks and Italians talk here about how its impossible not to get sucked in to the black economy.

In Ireland, the black economy appeared to wane as people had more money to spare. Now, on the bread line, people are resorting to cash transactions as they need every cent they can lay their hands on.

Is the black economy a product of poverty, or a contributory cause ?

http://www.guardian.co.uk/world/blog/2011/oct/21/europe-breadline-blame-culture-corruption?CMP=twt_gu
It is more product of inability of political establishment spend money properly.
Greece and italy have most corrupted public services within EU. People don't want pay more then they pay already in bribes.
In Ireland it is more about waste under rhetoric of left wing populism in order to buy votes through most generous welfare benefits and excessive pay in public sector. Plus cronyism and corruption covered by right wing rhetoric about supporting important businesses for country.
Those entrepreneurs, who don't have safety net, don't want to subsidize it for others and help politicians buy votes

[fluffybiscuits]

anyone who thinks any part of europe didnt undergo a mad housing boom like ireland in the last ten years needs to cop on or get the facts. Spain was the epicentre of it all. Italy was almost equally huge-in fact it has even more debt which is all that matters regardless of who was more stupid in the property market. It was a GLOBAL thing. Ahem subprimes.

I wasnt aware myself! I was going on the basis of Germany and I thought Spain was unaffected itself but probably need to do a bit more reading on the issue!