Growing Shadow Economy Makes Official U.S. Figures Increasingly Suspect

Just how much is going on off the books?


The shadow economy in the United States, consisting of off-the-books workers and unreported income, is booming.

According to a recent study, about $2 trillion in underground economic activity took place in the United States last year.

The informal sector includes everything from prostitutes to construction day laborers who are in the country illegally. Whatever their field, they are not paying taxes on their income.

"I think the underground economy is quite big in the U.S.," Alexandre Padilla, associate professor of economics at Metropolitan State University of Denver, told "Whether it's using undocumented workers or those here legally, it's pretty large."