The Underground Economy

Archive Report

Thriving Hidden Economy

Tax-Time Interst in ’On-The-Side’ Work

I usually charge $100 for the job,” said the repairman, “but it will cost you $90 if you pay me in cash.” Millions of American consumers have received discount offers like that; many have accepted and pocketed the savings. Others have bought goods from roadside stands or street vendors, or had such services as home improvement, car repair, housekeeping or hairdressing performed by “moonlighters,” people working “on the side.” The consumers were participating, whether they realized it or not, in what many observers have described as America's “underground economy.”

Some of the terms used for these economic activities—“underground,” “subterranean,” “black”—conjure up visions of cigar-chomping gangsters, drug pushers and slick confidence men. But outright illegal activities make up just a ...

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