Understanding the Underground Economy Roderick Graham

What is the Underground Economy? Productive activities that are not reported for tax purposes and are not included in GDP.

Describing the Underground Economy Economic activity is “underground” if: 1. It is illegal  Drugs  Prostitution  Gambling 2. Those engaged in it are avoiding taxes  Working “under the table” in legitimate businesses  Selling goods without licenses  Babysitting for money (not reporting it) 3. Swapping services  Ex: Trading dental services for landscaping services

Occupations in the Underground Economy  Nanny  Construction Worker  Tax Preparer  Tutor  Employees of small businesses (often undocumented immigrants)  Prostitutes  Drug Dealers  Street merchant

The Growing Underground Economy  The underground economy is growing in the United States is growing…how do we know? “The Federal Deposit Insurance Corp. (FDIC) released a report last week concluding that 7.7 percent of U.S. households, containing at least 17 million adults, are unbanked (i.e. those who do not have bank accounts), and an "estimated 17.9 percent of U.S. households, roughly 21 million, are underbanked" (i.e., those who rely heavily on nonbank institutions, such as check cashing and money transmitting services).”* *

Why is the Underground Economy Growing?  Economic downturn (no jobs available)  Corporate downsizing/outsourcing  Recent influx of immigrants

Why is the Underground Economy interesting sociologically? 1. Immigrants, minorities, and women are involved in the underground economy 2. People who are in generational, systemic poverty rely on the underground economy 3. The underground economy is a strategy through which disadvantaged people can overcome economic difficulties

Questions for “Home at Work” 1. What are some ways in which the women in Maquis Park participate in the Underground Economy? 2. What does this phrase mean to you: “By understanding their (women of Maquis Park) orientation to time and home…we can appreciate their calculus for making the decisions that shape their days”? 4. How do men play a factor in the lives of the women? 5. The author mentions three different types of boarders who move in and out of households. What are these three types?