Recession driving workers into underground economy

Published: 18 Apr 09 10:45 CET
Online: http://www.thelocal.de/national/20090418-18715.html

Germany’s worst recession since World War II is driving millions of workers into the ‘shadow economy,’ according to a report published Saturday in Wirtschaftwoche.

ADVERTISING

Deutsche Bahn to seal huge rail deal with Qatar - Business & Money (20 Nov 09)
New climate change goals to cost Germany €310 billion - Business & Money (20 Nov 09)
Disabled woman fired for eating pâté meant for patients - Society (20 Nov 09)

The informal - and untaxed - sector of the German economy could reach almost 15 percent this year, or €352 billion, according to economist Friedrich Schneider at the University of Linz. That output is equivalent to roughly eight million people working full-time, Schneider estimated.

Known in German as Schwarzarbeit, or ‘black work,’ the practice is especially common in the construction industry and for domestic work, where high German taxes and social contributions make working legally less attractive.

With taxes likely to become a major issue in this year’s German national elections, Schneider’s findings are being seized upon as an argument to cut taxes for skilled tradesman.

“To confront the rising informal economy, legal work must become more attractive,” Otto Kentzler, president of the Craft Workers Association, told Wirtschaftswoche.

Germany is not alone. Spain, Britain and Italy are also likely to see a sharp uptick in the informal sector of the economy, according to Schneider.

“The stronger the country is hit by the economic crisis, the more the shadow economy will grow,” Schneider told Wirtschaftwoche.

The informal economy had been steadily shrinking since 2003, according to Schneider’s research, and started to grow again once the recession started last year.

DDP/The Local (news@thelocal.de)

What do you think? Leave your comment below.

Fark It!	Digg This	Facebook	Share everywhere
Send to a friend	Printable version	Twitter This

Your comments about this article:

11:11 April 21, 2009 by Need NOT Greed

In the UK community links has been measuring the informal economy at a localised level. We have formed an indepth understanding to peoples motivations for working informally - namely out of need- to escapre poverty, rather than greed. As a result we have launched the Need NOT Greed campaign, asking government to prevent the need for informal work throuogh changes to the benefits and tax system and to harness this informal economic activity and create formal jobs where others could then be formally employed - a potential solution to the economic downturn rather that a consequence/ problem! - www.neednotgreed.org.uk

Report abuse »

Today's headlines

Match-fixing ring rocks European football

Some 200 football matches in nine European countries including at least three Champions League games may have manipulated in a huge match-fixing scandal, German prosecutors said on Friday. READ (2 COMMENTS) »

Editorial feud erects artistic six-metre penis

In a massive escalation of a long-standing editorial feud, the newspaper Die Tageszeitung has unveiled an artwork depicting the naked editor-in-chief of its right-wing rival Bild sporting a six-metre penis up the façade of its headquarters. READ (8 COMMENTS) »

Disabled woman fired for eating pâté meant for patients

A disabled Hannover woman working at a nursing home has been fired after 18 years on the job for eating pâté intended for patients, daily Hannoversche Allgemeine Zeitung reported on Friday. READ (14 COMMENTS) »

A file photo of Hitler in 1925 at an NSDAP meeting in Bavaria. Photo: DPA

France finds lost spy file on young Hitler

Secret French intelligence service documents on the young Adolf Hitler have surfaced in the country’s national archives, daily Le Monde reported on Friday. READ (4 COMMENTS) »

13/11 1970s film on private Hitler rediscovered »

Von der Leyen moots expanded child subsidy for poor families

German Family Minister Ursula von der Leyen has proposed expanding a monthly child subsidy for low income parents, daily Passauer Neue Presse reported on Friday. READ (2 COMMENTS) »

Defence minister expects Karzai to take action

NATO countries expect "more than just words" from Afghan President Hamid Karzai after he promised to combat corruption, German Defence Minister Karl-Theodor zu Guttenberg said Thursday. READ (3 COMMENTS) »

Springlike highs expected for weekend

Anyone planning a weekend outing will enjoy sunshine and springlike temperatures in the coming days as a high pressure system moves over the Alps and into central Germany, the DWD weather service reported on Friday. READ »

Chestnut tree kills pedestrian

A 47-year-old Frankfurt woman died late on Thursday after a chestnut tree suddenly fell and crushed her, police reported. READ (7 COMMENTS) »

More National

Today's most read Today's most commented

Latest news from The Local in Sweden

Blog

02/11 Berlin blasts landmark tower
12/12 An unlikely German hero for the British press
11/19 More Hitler bollocks from The Sun
09/27 The Trib's guide to Brangelina spotting
09/18 European single market? Not on iTunes

Essentials

Dating
Looking for your own blonde bombshell? Or is the strong, silent type more your style? Find a German sweetheart here.

Weather
"After clouds comes clear weather," say the Germans. But what about after that? Find out in The Local's weather section.

Blog
German stuff that's distracting us today.

Noticeboard
Whether you want to buy, sell, hire, announce or promote something, here's the place to do it - completely free of charge.

Discuss
Debate the news, ask for advice, make friends - or just let off steam.

News from the Goethe-Institut

Reading in Splendour: The new Central Library at Humboldt University in Berlin
The Humboldt brothers envisioned the totality and unity of the arts and sciences as their ideal.
Rebel energy from the Black Forest
In one German town, committed citizens are winning the battle against powerful energy companies.
The Incomparable Value of the Community: The Meister Eckhart Award Goes to Amitai Etzioni
Amitai Etzioni, one of the most profound advocates of communitarianism, has been honoured now.
A Venue for Avant-Garde Dance: The Mousonturm
The Mousonturm was a home for Frankfurt’s independent theatre groups and cabaret when it was founded.
Between Innovative Ideas and Banality: Concerts for Young Target Groups
Concert organizers have been developing new ideas for breaking down barriers between classical music and young people: concerts like events....

News from Young Germany

After the Fall: YG interviews director of Berlin Wall film
YG gets the inside scoop on the After the Fall documentary from co-director Eric Black
Researchers make new findings in the study of HIV
A new study may help to explain why only one of several of the simian immunodeficiency viruses...
A State becomes history
On October 7, 1949, the German Democratic Republic (GDR) was founded. The communist state existed...
Researchers give up search for missing relic of famed German poet
For years, historians have attempted to clarify where the stolen skull of poet Friedrich Schiller...
Master's program in E-learning and Media Education trains educators for the multimedia age
A new Master’s program in E-learning and Media Education known as Elmeb21 will be offered from the...

Rosetta Stone German Level 1

News from DeutschlandOnline

Defence minister urges afghan Government to act to bring order to the country
Germany's new Defence Minister Karl-Theodor zu Guttenberg Thursday said the Afghanistan government...
OECD predicts export driven German recovery from recession
Growing exports and government spending will help to drive Germany along a recovery path next year,...
Micro-Sensor in artery measures blood pressure
High blood pressure can be a trial of patience for doctors and for sufferers, whose blood pressure...

Jobs in Germany: 584

Show all jobs in Germany

Noticeboard

20/11 Looking to learn Salsa, Meringue or Cha-Cha?
19/11 House Cleaning in Stuttgart Areas
19/11 Virtual Assistant/Link Builder For Hire
18/11 Christmas Draw
18/11 Native welsh-speaker or native english speaker welsh accent
16/11 Seeking job in any company or in any organization.

SHOW ALL NOTICES »

Toytown Germany

23:32 Ice hockey clubs and teams in Hamburg
23:27 Detroit opens Michigan's first Cannabis College
23:23 Eating Adventure Treffpunkt In NuremberG (EATING)
23:20 English speakers in Ulm, um Ulm, und um Ulm herum
23:19 Is Germany a fascist state?
23:18 English Movie in Ulm or Neu-Ulm
23:16 Trust your documents online?
23:13 What American products should I bring to sell?
23:07 Moving to Stuttgart for Africom
23:02 Rant about Amazon Germany

FULL INDEX »

Advertising 2.0
MARKETPLACE - promote your business to half a million targeted readers a month on The Local. Find great products and services in Germany or tell The Local's readers about your own business.
CLICK HERE>>>

Sales manager - Berlin
The Local is seeking a talented and experienced media sales professional for our online advertising sales in Germany
FULL JOB DETAILS

Best Foreign exchange rates dealing - all major currencies
Foreign Currency Direct voted as offering the best exchange rates. All currency exchange transactions are managed by Ben Amrany. We guarantee that readers of The Local/Toytown receive a 5 star service
FULL DETAILS HERE>>>

Editorial intern - Berlin
The Local needs an editorial intern at its office in Berlin starting in January
FULL JOB DETAILS

JOB: Account Executive Global Brand Team
Edelman, the worlds largest privately owned PR agency, is looking for a native English speaking Account Executive (m/f) for the Global Team in Hamburg (starting in January 2010)
FULL JOB DETAILS

Food and drink gift baskets
We offer a wide range of exquisite and unique hampers, elegantly decorated for all occasions. Our service is first class and allows you to send personalised baskets to your loved ones across Europe.
FIND OUT MORE

Snappy summary of the week's best stories
The newsletter is sent out every Friday with an easily swallowed digest of the week's happenings allowing you to pepper your conversations with nuggets of news about the issues of the hour.
SIGN UP HERE>>>

Advertise