The Cash Economy

Buy coffee from a street vendor this morning? Pay the teenager down the block to mow your lawn? You may not realize it, but you probably participate in the shadow economy every single day. That’s the legal shadow economy — goods and services that aren’t illegal, but that go unreported to avoid labor laws and ...

Buy coffee from a street vendor this morning? Pay the teenager down the block to mow your lawn? You may not realize it, but you probably participate in the shadow economy every single day. That's the legal shadow economy -- goods and services that aren't illegal, but that go unreported to avoid labor laws and taxes. However, once these under-the-table transactions hit 30 percent of a country's GDP, they begin to compete with the formal market, imperiling countries' economic health.

Buy coffee from a street vendor this morning? Pay the teenager down the block to mow your lawn? You may not realize it, but you probably participate in the shadow economy every single day. That’s the legal shadow economy — goods and services that aren’t illegal, but that go unreported to avoid labor laws and taxes. However, once these under-the-table transactions hit 30 percent of a country’s GDP, they begin to compete with the formal market, imperiling countries’ economic health.

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