Underground Economy Is Suffering, Too

Forbes profiles underground-economy sociologist Sudhir Venkatesh:

One conclusion of Venkatesh's work is that the underground and mainstream economies are intimately entwined. "The boundaries are fluid, particularly in the global city where the black market has become instrumental--one might even say vital--to the overall economy," he says. In New York City illegal workers serve sex, drugs and takeout to the wealthiest members of society--or at least they did until financial sector layoffs began in 2008.

The underground economy includes a vast array of people providing services that are off the books but otherwise legal. Venkatesh enumerates those having a harder time in the face of the recession: office cleaners, squeegee men, informal security guards, "canners" who scavenge for recyclables (there's less consumption now, so less to recycle) and nannies whose employers have been laid off. And as business contracts, underground workers face certain problems unique to their status. They have no unemployment insurance or other benefits, and, with little protection from law enforcement, they tend to resolve disputes by physical means.