The economic downturn had a profound impact on many people and left many without jobs or working part time and they would prefer full-time employment. No demographic was spared from the slow hiring and limited job creation, but recent college graduates in particular had a difficult time during this period.
Under-the-table work more common during economic downturn
Many of these young people left school with a mountain of student debt and few prospects for employment, forcing them to take any job they could get to pay off loans. As a result, many have been working under the table and been paid in cash. From waiting tables at cafes to working on small construction jobs or completing freelance projects within their field, these millennials have sought creative and unusual ways to make a living during a long recession.
While it's not possible to determine exactly how much work is being completed off the books and how much income is not properly reported to the government, there is evidence the number of people working for cash has increased significantly in recent years. According to The Washington Post, the amount of cash in circulation jumped from $803 billion in 2007 to $1.18 trillion in March 2013. This may reflect the larger number of people being paid in cash for the work they complete. In fact, the source notes current retail sales are what would be expected if unemployment was at the 5 or 6 percent mark - current spending simply isn't consistent with the unemployment rate still close to 8 percent.
"It's typical that during recessions people work on the side while collecting unemployment," Bernard Baumohl, an economist at the Economic Outlook Group, told The Washington Post. "But the severity of the recession and the profound weakness of this recovery may mean that a lot more people have entered the underground economy, and have had to stay there longer."
The 2011 report "America's Underground Economy: Measuring the Size, Growth and Determinants of Income Tax Evasion in the U.S." estimates as much as 18 to 19 percent of total reportable income isn't properly reported to federal authorities
Increases need for business owners to streamline cash management processes
As companies slowly start hiring again, some people may leave their unreported, under-the-table jobs to establish themselves in a new career. However, for the time being, there are still many individuals who find themselves working off the books and being paid in cash. As such, many people are more reliant than ever upon cash, since they do not receive regular paychecks or have money automatically deposited into their accounts.
To accommodate these shoppers and ensure they are able to manage transactions appropriately, business owners need to have the most up-to-date cash counting machine on hand. The jump in people being paid with cash may lead more people to rely on paper currency, rather than credit cards, to make purchases, and with an optimal cash counter, entrepreneurs don't need to worry about manually counting bills at the end of each night.
July 31, 2013