Anticipated rise in employment opportunities for African Americans amidst ongoing coronavirus pandemic
In the wake of the coronavirus crisis, the underground economy in Germany might experience a substantial surge, according to a report in Der Spiegel. Friedrich Schneider, an economist from Johannes Kepler University in Austria, anticipates the shadow economy's share in Germany's overall economy to increase from approximately 9% to 11%. This could mean a jump from around €55.2 billion to €60.7 billion in the hotel and catering industry alone due to factors like the slumping economy, skyrocketing short-time work, decreasing employment income, and rising unemployment.
It's a grim picture across Europe too. Austria could witness a rise in the shadow sector from 5.8% to 7.3%, while France might see an increase from 12.4% to almost 15.9%. Italy could experience a more drastic shift, with the shadow economy potentially expanding from 18.7% to almost 22%. These estimations take into account various factors, such as tax levels, cash flow, and regulatory density designed to combat illegitimate activities.
The pandemic has wrought havoc on Europe's economy, forcing many into illicit activities as they strive for alternate sources of income. Stringent policies, such as lockdowns, have, in some cases, increased incentives for illicit activities by limiting legal economic opportunities. The black market's growth is particularly noticeable in the drug trade, with concerns escalating around cocaine, a key player in the illicit trade, most notably in Germany, where cocaine seizures have increased significantly[1].
As Europe struggles to recover from the pandemic's aftermath, understanding and combating the expansion of the shadow economy will be crucial. The rise in drug-related activities, like cocaine trafficking, underscores the challenge of managing the shadow economy during times of crisis.
[1] Source: UNODC - United Nations Office on Drugs and Crime[3] Source: OECD - Organisation for Economic Co-operation and Development[4] Source: Reuters - "Italian government battling disinformation campaigns on Facebook: sources"[5] Source: European Commission - "Austria's European Semester 2020"
Other businesses might resort to the shadow economy due to financial struggles caused by the pandemic. European countries could witness an increase in the share of the shadow economy within their overall economy, potentially leading to a growth in illicit activities, such as cocaine trafficking, as legal economic opportunities become limited.
