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The Underground Economy and Why It Is Bad For All Of Us

By: Dale Goldhawk

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Basically, the underground economy consists of people who are independent operators and who avoid or, more accurately, evade any legal responsibilities to their customers, communities or the country in which they live and from which they draw all the services they can manage.

A good catchall term for members of the underground economy is Leeches. When you use a member of the underground economy you use a person or an employer of other persons who:

-Does not pay income tax
-Does not pay GST or PST
-Does not pay workers compensation premiums
-Does not make employer contributions to the Canada Pension Plan or Employment Insurance
-Does not pay Employment Standards Act benefits so workers can have vacations and statutory holidays with pay
-Does not accept credit cards or, in most cases, cheques or other traceable payments
-Does not provide or honour guarantees or warrantees
-Uses and sells the cheapest and least durable products including counterfeit products
-Walks away from jobs at any time
-Has no business address or reliable means of contact
-Hires unqualified and potentially dishonest, unbondable, helpers
-May have a criminal record
-May be an illegal alien with no ties to the community or country
-Does not carry liability insurance and is likely uninsurable
-Is not licensed by any authority
-Is not certified for the work being done
-Is not trained
-Is not competent in at least some of the services offered and probably all
-Will not subject his or her work to inspection by any qualified person or agency.

This list could go on to include all of the negatives which can be countered easily by regulations, standards and mores prevalent in the legitimate above ground economy.

So what? If you deal with an unlicensed guy who paves your driveway or mows your lawn or fixes your roof for half of the price of a true professional, don't you save money? And isn't saving money a really good thing in any kind of economy? This is the dumbest way to look at dealings with the underground economy. An illegitimate construction contractor can cut his or her labour costs by about half by skipping all the ground rules of a legitimate contractor (see above).

This contractor can hire any yoyo to work on your roof or your electrical system or your plumbing. This contractor and his ilk cost our governments and the workers' comp system more than $1.5 billion a year.

This means the government -this is us, folks- can't adequately fund the apprenticeship programs we need badly across Canada. It can't provide all the health and protection we need in the workplace.

It means also that the legitimate contractor, who pays for training and skilled sub trades and top grade products and a million other things we need, is severely damaged with unfair competition.

In addition, while you are paying your full share of income taxes, GST, PST and health costs, all the leeches who make up about 15 percent of our economy are costing us about $30 billion a year by not paying these taxes. Don't blame only government when it can't provide better roads or an improved environment or the zillion other things we want and need.

Blame yourself for abetting tax evasion by the underground economy leeches who are laughing at you all the way to their banks.

Every time you give a buck to the underground economy, you are taking a lot of that dollar away from elderly Canadians who depend on old age security payments and other supplements to their meager incomes.

You are depleting the money available to eligible unemployed workers including those who have to take time off to care for gravely ill or dying family members. You are potentially depriving low and modest income families of benefits from the Canada Child Tax Benefit and the GST credit.

You are taking money out of resources that should go to needy children, our health care system, post-secondary education and all our social services.

Think about this: the services we use to live decent lives in Canada are paid for, largely, by taxes paid by each of us. Without this money, Canada would enjoy a quality of life similar to Iraq or the Sudan but even worse because of our cold climate.

Deduct about 15 percent of the money we need and you put a huge hole in our services. That's what the underground economy does every year. We are chumps for paying people to take money and resources out of our pockets while giving us, in all cases, inferior or, at least, questionable goods and services with no consumer protection whatsoever.

We might as well carry signs around our necks reading 'Pickpockets welcome' with a big arrow pointing to the pocket or purse where we keep our cash.

The next time someone comes to your door or telephones you offering cheap moving, renovation, land in Florida, car repairs or anything else in return for cash up front and no questions asked, ask yourself if you want your pocket picked once again or if you would rather pay for professional work from the above ground economy.

Ask yourself if you want to get involved in a criminal conspiracy to evade paying taxes or do you want everyone to pay fair taxes for the services your family needs. Ask yourself why you would want your blood sucked by a leech when you can deal, instead, with the good guys in Canada's marketplaces.

Article Source: http://depositarticles.com/

Dale Goldhawk - journalist, author and broadcaster, Dale has protected consumers through his shows on CBC Television, CBC Radio, Global Television and the CTV Television Network and his columns in the Toronto Telegram and other newspapers. www.goldhawk.com

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