American Shadow Economy Displays a Larger Picture of Joblessness

The American economy, even though it has showed signs of growth since June of 2009, hasn’t really helped the people to buckle up their lives. There are 4.8 million unemployed Americans, 40 percent of all those jobless, and they have not had a job for more than 27 weeks.

The job market shows signs of recuperation, but the same sign isn’t seen among the people, which has given the country’s shadow economy a turn for the worse. America’s shadow economy harbors activities that are also illegal, from prostitution to drug dealing, apart from low level jobs like working construction for a day’s money.pix

Economists estimate that around $2 trillion flows through the shadow economy, which, while providing a day’s meal for some, would also contribute to the lack of similarities in economic data.

Since September 2010, retail sales have had an annual growth of 3.5 percent, and taxes have increased which has led to jobless benefit eligibility to reduce to 73 weeks or less from 99 weeks in some states. Unemployment (USURTOT) has risen up to 7.7 percent from 4.4 percent in 2007, while income has only gone up by 2.2 percent in a year.

Mitchell Hirsch, an advocate for unemployed workers for the New York-based National Employment Law Project, says that many workers enter the shadow economy increasingly nowadays. According to him, this type of offbeat work “is definitely more significant than before the recession, especially among people who are tapping out savings and losing unemployment benefits.”

“They’re finding in some cases desperate and in some cases very creative ways of trying to get some kind of income legally,” he said.

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