Stamp out undeclared work to boost inclusive labour markets

CIETT FAST FORWARDUndeclared work undermines social systems and employee rights, but good labour market regulation can reintegrate workers and benefit the economy, writes Denis Pennel.

Estimates suggest that among the global working population of three billion people, almost two-thirds – some 1.8 billion people – are working in the undeclared economy. Here in Europe, levels of undeclared work differ widely from a low of 7.5% of GDP in Austria to 13% in Germany, and from 21.1% in Italy to a high of 31.2% of GDP in Bulgaria. Undeclared work poses a number of macro-economic challenges. It undermines business and the economy and impacts workers and citizens. Eurociett therefore welcomes the Commission initiative to establish a platform to exchange national best practices on tackling undeclared work, but it should not be just a talking shop!

For governments, undeclared work obstructs revenues from taxes, VAT and national insurance, which undermines the very sustainability of social protection systems. It also weakens the power of trade unions and collective bargaining. It places legitimate business at a competitive disadvantage in comparison to businesses operating in the black, and forces hitherto law-abiding firms away from regulatory compliance. Customers of the undeclared economy also suffer as they have little legal recourse if a job is badly done and no insurance or guarantees that health and safety regulations are followed. The impact on workers is profound. Undeclared employment effectively places them outside the system. They have no job security, no rights and no career progression. As a result, undeclared workers tend to experience a lower quality of work and working conditions.

L’intégralité de l’article peut être lu ici (en anglais)

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