Monday, March 23, 2015

The Underground Economy

      The underground economy is a system off people who are unable to find a job.  The purpose of this shadow economy is to provide income "under the table" to these people, which excludes them from paying taxes.  Common places an underground, or shadow, economy is in effect are in Brazil or in southern Europe.  This "hidden" economy can be beneficial because the people are able to make money for themselves which they then use to buy things which helps the economy.  People who are unable to get a "real" job are able to earn a living with this shadow economy.  The underground economy could be detrimental the more people are getting paid under the table, the less taxes are coming into the government's funds.   Also, taxes  would go up because less people are paying them and the government needs money in order to do their job.  Overall, the underground economy helps the people in need of a job and money but it hurts the government by not providing revenue.

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