To compensate for the real loss of income, the willingness to “botch up” is currently increasing enormously. In two sectors that mainly affect women, bills are only a minority program. The shadow economy is also flourishing in construction. Only a few can afford their own house with all their income, partly due to the increased raw material prices. The well-known economist Friedrich Schneider knows what incentives would initiate the switch to legality.
The Austrians charge a small fee for help in the household. In 2021, they spent some 2.3 billion euros on domestic work and childcare, according to a study by the Kreutzer, Fischer & Partner network of advisors. Expenditure continued to rise in 2022. According to a calculation by the Linz economist Friedrich Schneider, about 256 million euros will be invested this year in babysitters, au pairs and childminders. Even more is paid out for domestic help, a total of around 800 million euros.
trust relationship preferred
What makes it so special is that some 90 percent of private cleaning workers are unregistered and more than two-thirds of private childcare workers work illegally. “There are two main reasons for this,” says business economist Andreas Kreutzer. “There is only a small commercial offer in these areas and there are often people with whom there is a relationship of trust. After all, they break into very confined spaces, receive a key to the house or apartment, or take care of the children.”
braking threshold in the descent
Current inflation is another factor driving more and more working people into the informal economy: “People have less real income due to rising inflation and high energy prices. So they need extra money to maintain their standard of living,’ explains Schneider, why many ‘almost screw it up’. The inhibition threshold for paying someone without a bill also decreases with the rapid price increases. “People are angry, they feel abandoned.”
Increase of 900 million euros in 2022 expected
All in all, despite the planned tax and other measures, the economics professor expects that inflation will increase the shadow economy by about 900 million euros in 2022 to 28.720 million euros (6.8 percent of forecast GDP). Nearly 40 percent of non-invoicing transactions take place in construction and craft businesses: “Many homebuilders are happy if they can afford the more expensive raw materials, but they don’t want to or can’t afford the official prices for assembly – and hire undeclared workers to pay for it.” to do.” Auto mechanics and machine technicians make up 16 percent of the domestic informal economy, and just as many work in hotels or restaurants without being registered.
Required: “Mini-job scheme” as in Germany
Incentives are needed to slow this development: “In addition to the planned elimination of cold progression, an important step would also be to reduce non-labour costs and increase wages,” says Schneider. The professor does not give the service check a good grade: “The system is too complicated and it is hardly advertised. The German mini-job scheme, where everyone regardless of tax class can earn an extra 500 euros, is the better approach.” But measures such as the craft bonus also help.
Whoever gets caught has the shards
A decline in the informal economy and thus a return to legality would give “clumps” and customers a better night’s sleep. Because if you get caught by the finances, you have to expect fines. Not to mention the shock that the pension slip could one day cause: if you pay little, you get less out in old age.
Source: Krone
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
