Black Economy

ECONOMICAL ENGLISH

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I want to give an idea about what does black economy mean, what it represents in Europe and more specifically in Spain.

What is Black Economy?
Hidden sector of theeconomy where

private transactions go unreported. So they avoid paying taxes such as social security. Being a hidden sector appears the problem that there is no way to know how large it really is, wejust can do an approximation.
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I wanted to show in this picture that Black economy doesn’t have any advantage, and if you get in this activity, being in the illegality, sooner or later, you willbe in trouble, having problems maybe because of an inspection of work or if an accident take place for example.
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Which are the principal causes that motivate this activity?
The two main causesare: - Individual benefit; People that decide to get out of the legality just to get some more benefits in a short term.

- Fiscal pressure(it reaches 70% of the gross income in some countries);there are other people that, because of the high percentages of fiscal pressure, are forced to work in black or to employ other people in black, what means without any contract or insurance.
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Howto fight this activity?

Every government should do:

- More inspections of work (short

term solution)

- Making aware the population (long term solution); this one would be the perfectsolution, you can’t inspect every enterprise in the country. They must be conscious to do it properly by their own.

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Where is this activity focused?

- Before (normal situation) : Construction,hotel and catering business; maybe

because there are so many temporary workers in these sectors and they move a high amount of money. Some illegal

immigrants find their jobs in these sectors
aswell.

- Now

(situation

of

crisis)

:

More

widespread; with the arrival of the crisis, there has been a growth in other sectors, for example the transports.
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Black economy...