The Underground Economy

The underground economy is made of people who do not work a regular paid job. They get paid under the table with no income reported and no taxes paid. Jobs in the underground economy are typically linked with illegal things such as drug dealing but also includes housekeepers and nannies.

The shadow economy is beneficial in the way that the money people make from their "secret" jobs is used for personal consumption which rises the economy. It also allows people that are having trouble getting a full or part time job in the "real" economy to earn money.

Although it can be beneficial, it can also be unfavorable. The more people are being paid under the table without taxes, the less money the government has to spend. Government programs depend on tax money. With less taxes being paid, the higher they will be so the government can do its job. In addition, people with jobs in the secret economy do not get Social Security or health benefits. There is also a higher risk of losing your job and not getting paid at all.