Black economy thrives as austerity cuts deep

Ireland faces a conundrum as it debates efforts to reboot its economy. How much of any recovery will be played out legitimately and how much of it ends up in the grey, dangerous zone known as the black economy?

In the period since the global financial crisis we all know that the cost of being employed legitimately has increased. Increased direct and indirect taxes have made it more costly for employers to legitimately do business and nowhere is this more evident than in the construction sector.

An extended period of brutal declines in year-on- year activity has sapped morale in the building trade. Aside from rapidly falling volumes, wages have declined sharply and many of those employed in the sector are either redundant or have been forced to emigrate.