Weak Economy Pushing Workers Off the Books

By Krishn Kaushik on Jan 7th, 2011

On 125th Street, some vendors are part of the underground labor force (Photo by Krishn Kaushik)

Tony Smith is sitting on a bench facing the basketball courts in Colonel Charles Young Playground on East 145th Street. A short, heavy man, he looks lost and gloomy as he watches teenagers enjoy a Sunday pick-up game. “It’s not fair,” says Smith, 42, eyes still on the game. “But I know it could have been worse.”

Smith has worked as a delivery van driver for a small transport company in Washington Heights for four years. For the last nine months, he has been pushed to work off the books. “I was at least lucky to not lose the job,” Smith says, mentioning that the only other driver, “a nice Latino guy,” was fired.

Smith is part of a workforce earning a living without any government documentation or workplace protections, due to the still struggling economy. “I know two more people working off the books now,” says Smith, who believes the underground economy is growing.

At Lenox Avenue and 125th Street, Tony James distributes handbills to pedestrians promoting a nearby pawn shop. James, in his late 50s, says he’s had many jobs previously, including working in garages, but has been leafleting for the past three months. “Five of my friends are into same thing,” James says. Not everyone with this job works off the books. “Some of these shops like to put in the paper, some don’t,” he says.

“The underground workforce is made up of individuals from many walks of life,” Susan Pozo, an economist at Western Michigan University, says via e-mail.

Smith says, “They can be tailors, janitors, nannies, dog walkers.”

While he thinks the undocumented workforce is on the rise, it’s tough to find data to support the claim. Pozo estimates that, based on the documented unemployment rate in upper Manhattan, off-the-books workers constitute roughly 13 percent of the labor force. She knows of no estimate of the total worth of the country’s underground economy.

Harvard economist Lawrence Katz says via e-mail, “There is no good systematic data on the size of the underground economy.”

Even government authorities can’t provide any figures. “We really don’t have data,” Martin Kohler, regional economist with the Bureau of Labor Statistics, says in an e-mail. “And I am not sure who would.” Employment services uptown were unable to shed any light on the subject.

“I gotta do what I gotta do to not let my family starve,” says Greg Browne, selling winter hats and scarves from a small wooden table on West 125th Street. Browne says that while most 125th Street street vendors are legal and have trader’s licenses, some work without authorization. He believes the high unemployment rate might even be pushing some young people to work in “drugs and the likes.”

While undocumented immigrants always work off the books, the population of legal residents joining their ranks may be growing. “It is always on the rise,” says Richard Weiss, communications director for the Construction and General Building Laborers Local 79 union,  serving New York City.

Legal citizens form a substantial part of undocumented workers, Pozo says, and “I would guess that the proportion of legal immigrants/natives in the underground workforce has risen.”

While employers might increasingly hire legal residents, she doesn’t see an appreciable rise or fall in the total numbers of such workers. “While those laid off from the above ground sector might look for jobs in the underground sector,” Pozo says, “there aren’t many jobs there either.”

Those working without any benefits, legal protections, or without paying taxes don’t prefer to work off the books, but may do so out of desperation. “I have to pay for electricity, rent, gas, phone, food and I need some work for that,” says Browne, who was laid off a year ago from the restaurant where he worked.

“Can’t survive on welfare and unemployment,” he adds.

Weiss says, “These people are exploited due to their economic situation.” He adds that many times underground workers are paid less than minimum wage while their employers also evade taxes. “They are treated as disposable commodities,” he says.

Browne won’t specify how much money he makes in a month. He says he has to move his location often to avoid being bothered by the police. James says he only makes $300 a week distributing handbills and advertising the pawn shop on a signboard he wears. Smith reports earning $750 a week as a driver, good money, but without any benefits.

“I do hope things improve soon,” Smith says. His van is parked outside the playground. He fears he might lose his apartment in Brooklyn, where he lives alone, if things don’t change soon.

“Sometimes I sleep in the van,” he says. “Just to get used to it, in case.”

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