Due to its secretive nature and the unwillingness of participants to discuss it, facts and figures on the black economy tend to be estimates. It is certainly an opaque phenomenon, rather like the elusive dark matter that CERN is spending billions seeking. Together takes a look.
Protestors climbed cranes in De Broukere, halting the rennovation of the Anspach Centre in protest at delays in handling people without papers in Belgium.
No-one knows for sure just how pervasive it is or how many people are involved, but experts tend to agree that the shadow economy is growing and is an estimated 20 per cent of Belgian GDP, some 75€ billion.
The main drivers for the growth are migration, fortified by EU expansion and Belgium’s anti-immigration policy, combined with high taxes. For the consumer, the appeal of using the black economy is financial – off the books is cheaper.
Is it possible to get through a day without interacting with it? Do you employ a cleaner? Who is serving your food and drink in bars? Who is building and maintaining your home, your office? How many people would still employ cleaners and nannies if they had to go through official channels?
PROS AND CONS
The many construction cranes in Brussels
This highlights why the shadow economy is good and bad. The state receives less tax, the consumer pays lower prices, and undocumented workers receive no protection. It also demonstrates why it is such a politically charged issue – not only does it affect the state’s income, it also raises the divisive issue of migration and minority communities.
Racism is an undercurrent of the debate – tax avoidance is generally seen by Belgians as being acceptable, no more than a bit cheeky, with the notion of ‘putting one over’ on a government that taxes too much. But you don’t have to talk long with people before they start bringing up Polish builders, Moroccan workers and other stereotypes tend to end up on the receiving end of the familiar ‘Immigrants coming over here and taking our jobs’ refrain. Migrant involvement in the black economy is seen as wrong, something that must be stopped.
One place where a little light shines on the hidden economy is on Brussels’ Rue Dixsmunde – on the walls of buildings, ‘work wanted’ adverts are scrawled, with accompanying mobile phone numbers, while small groups of people of all ages wait patiently by the side of the road, waiting for someone to drive up and offer them work. The difference is that most have no permit or papers.
WAITING FOR WORK
Costin is a Romanian in his forties, who has been working in Belgium for six years. Along with up to 300 others he hopes to find work every day. Most of the employment he finds is in construction where he earns 100€ per day. In his bag, he carries his tools and protective clothing. “It’s hard because you don’t know if you will find anything, so I come and wait,” he explains. “It’s getting harder with the banking problem, there is less work now.”
Around the corner, outside Le Petit Chateau, an open reception centre for asylum seekers, Amadou, 22, from Guinea is also waiting for an opportunity to earn some money with a group of African friends. A car pulls up but, after a brief discussion, it drives away without anyone being offered work. Amadou takes it in his stride – he only manages to find work a couple of days a week anyway. His friends are also finding it harder. I ask what happens to him if he can’t get work. “I have to go back inside there,” he says, nodding towards the centre. “I don’t want to, I’d rather work. It’s tough in there, but they were good to me and helped me find somewhere to live.”
Danny Sriskandarajah, of the London-based Institute for Public Policy Research, says: “A cynic would conclude that Europe generally does well out of these people, who take work that most locals do not want. But another view is that governments do not want to do anything about them, because it is too politically risky to hold an amnesty for immigrants when their presence often triggers an emotional response from the public.”
The credit crunch and the worldwide economic slowdown are going to affect the shadow economies and how they are perceived. It is predicted that the movement of people from poorer economies will increase and the pressure placed on stronger economies may cause a political crisis.
FAR-RIGHT RESURGENCE
The recent Austrian elections led to a resurgence of far-right parties, who campaigned on an anti-immigration platform, and won 30 per cent of the vote. It is feared that such campaigns will exploit the global financial situation, and next year’s European Parliamentary elections could see a record number of extreme MEPs sitting in Brussels and Strasbourg.
In Belgium, such developments could strengthen the Vlaams Belang and weaken the existence of the Belgian state.
Undeclared work has always been part of economic activity and as long as people seek to cut costs and there are people who are unable to join the official economy, the black economy will always be with us and no attempt to stamp it out will succeed. The question is, how do we accept this fact of economic life? So far, there are no substantive answers.
First published in Together Magazine
