If you’ve listened to election promises in recent weeks, you’ve likely heard all sorts of proposals, from housing to cities or the environment. But there is one An overlooked topic In every spin: That is the underground economy. Neither party has any proposals that reduce autonomy in its manifesto, nor do they bring it up in their rallies and speeches. As if not.
Illegal activities are a taboo subject during election periods as stopping them can have a negative impact on candidates’ voting prospects. And since there aren’t many votes in favor of any of them, it’s best to leave things as they are. However, various studies estimate that the underground economy In Spain it is 20% of GDP. Therefore, around 300,000 million euros circulate outside official channels.
So wouldn’t it be interesting to get your hands on it? Is it too difficult to increase Treasury and labor inspections for this purpose? Who lives in b away from the prying eyes of the state and why do they do it?
In this case, as in many others, there are a few false premises that need to be dispelled. First, that idea A moderate increase in the number of inspectors will increase the collection, and the Treasury will enter an amount much higher than the current amount, which will allow it to significantly reduce the tax burden faced by Spaniards -now it is about 38%, according to Treasury data-. Similar to what Podemos proposed in the 2016 elections or what Unai Sordo (CCOO) proposed this week “Get into Trena” formal users of the informal economy.
Second, there is basic consciousness Activity at b occurs because part of the workers are unwilling to pay Taxes. For this reason, they ask their employers not to register. In the same way, the underground economy seems to represent specific, isolated activities, and even in the shadows when this is not exactly the case.
Lack of data
Professor of Applied Economics at the Autonomous University of Madrid Santos Julia has spent 40 years studying the underground economy And before answering the questions that have just been asked, he makes it clear that the main problem is the underground economy There is no official data. All estimates, approximations and calculations are based on data from surveys such as Active Population (EPA) or Time Use (EET) from the INE or econometric models that give an idea of the evolution. economics but they are still descriptive of what is happening.
In the first case, the The National Institute of Statistics asks whether people are working or not how much they do it; Then, it’s a question of estimating unreported work hours, for example if a person claims to be working at the same time as receiving unemployment benefits. From there, the data from those reports that identify illegal activities in specific sectors, specific regions, specific countries are derived. “But these assessment methods can be desirable,” insists Prof. Santos Julia.
This is also indicative Lake Santiago Peñas, That too Professor of Applied Economics From the University of Vigo and Funcas senior researcher, and who share Expert in preparation of White Paper on Tax Reform, commissioned by the Treasury and released last year. “Unfortunately, we do not have official estimates of, for example, regional financial balances. Most of the works are academic and provide many conclusions that may change over time,” says the expert, adding that the white paper highlights the importance of creating an official task force with diverse and independent experts to explore these questions and create estimates. .
All evil is not the cause, nor the end of the worker
On two other issues, Santos Julia is clear: it is not known how much will be collected if a strong strategy to combat the underground economy is launched, nor will the results be positive. It is not clear that all the products in b will be transferred to the legal channel It can also lead to closure of companiesOr an increase in the price of frequently consumed goods, which today are cheaper precisely because the company that produces them illegally saves part of the costs.
At the same time, he emphasizes that workers are the most vulnerable part of the chain that leads to being outside the law and tend to engage in more visible activities than they think. A worker Employed part-time, but actually working full-time The farmer who collects the products sold in the biggest supermarkets in Spain without a contract are frequent examples of informal activities, which have a more negative impact on the economy than in the case of “hands-on” students. Some gardens, a swimming pool or children in their spare time and money in hand.
Where, when and who
So, who exactly is involved in the underground economy? Studies show that this occurs above all in the primary sector (agriculture, livestock, fishing, mineral extraction), construction and the hospitality industry. that is, Low-skill operations where the worker is more insecure Due to this low training and labor and legal culture.
That is why informal employment in Spain is highly concentrated in the regions of Extremadura, Andalusia, Castilla-La Mancha and the Canary Islands, as in all of them it accounts for more than 25% of their GDP. The data also shows that The struggle against this type of action is related not only to the study but also to the economic modelBecause it is more complicated to operate outside the law in high production activities and large enterprises.
However, this map from the Institute for Economic Studies (IEE), based on other studies, reveals that despite the great differences between autonomous communities, the underground economy is by no means the only one left: Even Madrid has the lowest rate at 16%.Still above the European average of 12%.
Socially, Spain is above average. According to a well-known study prepared by economists Leandro Medina and Friedrich Schneider and published in 2017, the country’s underground economy accounts for 17.2% of GDP. The European average would be 16.6%. At the bottom, France, Germany, the United Kingdom and Belgium have the lowest weight of this type of activity, while Italy and Greece have the most informal activity.
That is why, Government In your future statement Spain 2050ensures that Its sixth objective is to “reduce the weight of the underground economy At least until that year comes, until it stabilizes at a level similar to that of the EU’s most developed countries. Your intention is to do Strengthening the resources of tax administration Dedicated to the study, because in twenty-seven, on average, they have a high proportion of employees with these functions, but better integrate the tax agency, regional treasuries and labor and social security inspectors and the development of new technologies. For that study, strengthening communication and awareness.
As for when, it’s not fully confirmed, but the theory says so More underground economy in times of crisis, high unemployment forces the unemployed to accept unregulated occupations. Similarly, this also gives the impression to experts that it is a recent practice Pay digitally This led to a reduction in the volume of activities. On the other hand, the epidemic may have changed the phenomenon somewhat, although economists point out that it is not yet known in what way, or to what extent, it was a factor contributing to the over-collection of the Treasury. Recorded this year.
“The digitization of payments and greater awareness of the loss of rights for workers to work in b, both processes caused by the epidemic have reduced the underground economy, therefore, tax fraud is already social security. The statistics of the affiliates of social security, what GDP is growing and what the EPA says Taking into account, shows exaggerated employment growth. We are talking about hundreds of thousands of jobs,” says Santiago Lago.