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Spain The Underground Economy
With the growth in unemployment, rising labor costs,
rigid
legal regulations, increasing numbers of layoffs and
discharges,
and high employer social security taxes, since the 1970s
Spain
has experienced the growth of an increasingly important
underground economy (economia sumergida). Its rise
has
been of growing concern to government policymakers.
Observers
estimated that it accounted for 10 percent to 15 percent
of the
GNP, and a 1985 government study suggested that the number
of
those employed in the underground economy amounted to 18
percent
of the entire active labor force. Other analysts believed
that as
many as 33 percent of those officially listed as
unemployed--
about 20 percent of the working population--were actually
working
in the shadow economy. Workers in this sector were
particularly
numerous in labor-intensive industries and services.
According to
official estimates, agriculture accounted for the largest
share,
estimated at perhaps 30 percent; services claimed up to 25
percent; construction, 20 percent; and industry, a little
less
than 20 percent. Most of those involved in the service
sector
worked as domestics.
Typically, workers in the underground economy were
young
people with minimal educational and professional
qualifications.
Many were single women, more often than not, those without
family
responsibilities. This sector of the economy was marked by
high
labor turnover; its employees earned substandard wages,
and they
often toiled in unhealthy surroundings, frequently at
home.
Though wages were low, those who worked in the underground
economy could avoid paying taxes and social security
contributions--an aspect of the sector that made it
attractive to
employers as well as to laborers.
Data as of December 1988
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