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The Underground Economy

Many newcomers to the United States work “off-the-books” in the “underground economy,” for a number of reasons. In many instances, the newcomer is not able to work legally, lacks immigration documents or a work permit, and does not have the requisite social security card. In many other cases, the newcomer accepts the undocumented employment because nothing else is available. While some undocumented employment situations are beneficial to both employer and employee, as is often the case for childcare, many others can be exploitative.

Undocumented employment is never truly desirable. Yes, you might be paid in cash, and not subject to withholding for taxes and other benefits. The probability is that the employer, not you, the worker, will enjoy the cost savings. You will have no benefits of any kind, and little access to the legal protections commonly enjoyed by employees in the United States.

The government has a difficult time dealing with the underground economy, and it is an important social issue. Most efforts to control the practice involve actions against employers, either in an effort to collect more tax revenues or to deal with issues of illegal immigration.

It is important to keep in mind that not only is working “off-the-books” against the law, but taxes are due on the income, even if the government has difficulty collecting them.

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