The Underground Economy's Effect on Real Markets

Podcast created by: Austin Davis, Jordan McCombie, and Patrick Thomann

Austin, Patrick, and Jordan discuss the underground economy, emphasizing its vastness and complexity. They explain that it includes activities like unreported tips, off-the-books hires, and street vendors, collectively amounting to trillions of dollars globally. The underground economy can constitute up to 3% of GDP in some countries. During the COVID-19 pandemic, informal work expanded as a survival strategy. The hosts highlight the ethical dilemmas, tax implications, and unfair competition issues posed by the underground economy. They also discuss potential solutions, such as simplified licensing and tax forgiveness programs, and the challenges of eliminating it entirely.