The Unemployed and the Paid Informal Sector in Europe's Cities and Regions

The aim of this chapter is to evaluate critically the notion that the unemployed in the European Union (EU) disproportionately participate in, and gain from, paid informal work and thus that many of them enhance their standard of living with such illegal earnings. ¹ Having gained currency throughout the 1970s and 1980s (Gutmann 1978; Matthews 1983; Rosanvallon 1980), this perception has become particularly popular at present. The current period of high and prolonged levels of unemployment has been accompanied by media campaigns and public outcries about alleged cases of benefit fraud committed by welfare spongers’ or ‘scroungers’ (see Cook 1989; Malone 1994; Pahl 1985). Politicians interested in reducing social security expenditure, moreover, have done little to assess the validity of these claims. Instead such suspicions have been frequently exploited to legitimate reductions in welfare provision for the unemployed and to increase expenditure on policing the system (see OECD 1994, p.204). Neither has it been questioned by much of the recent theoretical academic discourse on employment and welfare. Contemporary analyses of the role of paid informal work in capitalism, for example, view such work simply as another form of peripheral employment conducted by the poor, marginalised and unemployed (Portes and Castells 1989; Portes, Castells and Benton 1989; Sassen-Koob 1984, 1989).