At a time when the German economy remains in a shrinking phase, the underlying economy and the black work They are aware of remarkable boom. The rate of participation in the economy in economic activity has increased sharply in the last year, according to the latest statistics.

According to the distinguished economist Friedrich Schneider at the University of Leeds, for 2024 the magnitude of the economy in Germany is estimated at 482 billion euroswhile in 2025 there is a further 6.1%rise to 511 billion euros. In practice, the economy now accounts for 11-12%of the country’s GDP, a percentage comparable to other developed countries, but clearly lower than countries such as Romania (30%) and Greece (22%).

Falling Tax Ethics and Increasing Black Labor

But what factors lead to this rapid increase in black labor and underlying economy? The answer, according to Schneider, lies in the intense sense of dissatisfaction that citizens feel when they are required to pay high taxes and contributions, without receiving reciprocal services. *When transport is underfunded and the state does not adequately meet the needs of the citizens, the tax ethos is declining*, it notes.

He himself emphasizes that ‘Black labor is the tax revolution of the little man’as it is mainly a reaction to tax pressure and not extensive tax evasion. Great taxation, coupled with inadequate government benefits, is pushing more and more citizens to informal forms of work in order to offset income losses or to reduce tax burden.

The role of social benefits and the motives of the underlying economy

In the public dialogue the issue of social benefitswith the edge of ‘Citizen’s allowance’ (Bürgergeld). Critics argue that increasing social spending creates incentives for black labor. After the increase in this allowance by 12% from January 1, 2024, more than 88,000 people are said to have officially left marginal jobs – many of which are crucial to the economy.

The discussion exacerbated when Chancellor Mertz suggested restriction of housing allowance for beneficiaries ‘Citizen’s allowance’causing strong reactions from the SPD and the opposition. At the same time, Labor Minister Berbel Bas has publicly acknowledged that state support has attracted * “mafia structures” * and people who illegally exploit the system, work black and receive social benefits at the same time.

Challenges in the suppression of the underlying economy

Effectively dealing with these phenomena requires better coordination and intersection data between the competent services. The government is focusing on the closest interconnection between employment centers and customs to combat black labor.

Finally, according to Schneider, a key role in reducing black labor plays a thriving economy. *”If the country goes into full growth phase, the economy will retreat”*, the expert estimates.

Curated by: George Passas