1. Criminals: From fraud to kidnapping, criminals do not inform their governments of their annual incomes.
2. Politicians and Bureaucrats: Bribery is alive and well in the world. The only country that could have saved dishonest individuals from government service is Singapore. When Mobutu Sese Seko left office, he had accumulated a billion dollar fortune. He could have written a check and paid off Zaire’s Billion dollar foreign debt. I suspect the same could be stated of most dictators who have been in office for three years or more.
3. Immigrants: If they cannot legally do business in their adopted nation so they are automatically assigned to the underground economy. This is as true of Indonesians fleeing to Malaysia as it is of Mexicans fleeing to the U.S. The best guess is that there are most likely between 18-20 million undocumented workers in the United States. All are members of the underground economy.
In this article published in the online newspaper «barcelonareporter.com» we see the situation of immigrants in the underground economy in Spain.
More than half the immigrants in Spain work in the underground economy. Domestic services, construction and agriculture are the sectors hardest hit by this phenomenon. (12)
4. American Citizens: In the USA, you are only considered unemployed as long as you are drawing unemployment checks. After the payments end, you no longer exist at the U.S. Dept of Labor. In the past few years, six million workers have disappeared from the U.S. Dept of Labor unemployment statistics. I suspect that many have joined the underground economy. The U.S. Government estimates there are 25 million underground economy entrepreneurs. Some are homeless collecting aluminum cans and crowding day labor halls. Some are merchants at Ebay, which has 40 million merchants, who make Internet sales that go unreported. The smarter ones take a clue from the Owlhooters of the 1950s and 1960s and go to local Junior Colleges and learn new trades.
5. Employed Americans: Trade-persons, professionals and nearly everyone with a useful skill often does side work for which they are paid in cash. Business owners often don’t report all their income. Most regular employees earn some unreported income. These people have one foot in the classic economic system, the other in the underground economy.
6. Sophisticated Traders: These people, from almost every country, realize that putting all of their eggs in any a single economic basket is a poor bet in the long term. They often go offshore to boost investment earnings and minimize taxes. Governments, like the United States, are trying to bring these traders back into their national economies. This group controls trillions of dollars of investment capital. Whether enticed by high taxes, excessive regulations, ineffective law enforcement, corrupt government or poor laws, it is clear that government is the cause for the growth of the underground economy. (11)