The German economy has been falling for years, nor in 2025. More growth is not expected – only a small plus is expected. At the same time, black and other economic activity in the shadows, which have not been reported are blooming. But what is actually hiding behind the fact that the share of the gray economy in the overall economic performance of Germany has increased by more than eleven percent in just one year?
In 2024. year the share of the gray economy amounted to 482 billion euros, which is the highest level in ten years and exceeds the federal budget. For 2025. Economist Friedrich Schneider provides a further increase in Linz – at 511 billion euros, which would be a new increase of 6.1 percent.
Schneider has been dealing with this phenomenon for more than 40 years. Instead of a “work in black”, he prefers to use the term “gray economy”: “It is economic activities that are legal – but the state is done without paying taxes and social contributions,” explains Schneider in the interview for Deutsche Welle. Legal provisions such as the minimum salary or maximum working hours are circumvented.
Compared to gross domestic product (GDP), Germany with the share of the gray economy between eleven and twelve per cent occupies the middle of the scale among industrial countries. Romania, for example, records a share of 30 percent and Greece 22 percent.
To calculate the scope of the gray economy, Schneider compares the amount of money in circulation with registered economic activities.
Decline in tax discipline
What are the main reasons for the growth of work on the black and gray economies? There is a pronounced sense of citizens to pay too high taxes and contributions, Schneider points out.
“In Germany, we have a situation where the trains function, many bridges on highways are damaged and must be rehabilized, which causes long crowds and waiting, paying for money from the state, then decreasing their tax morale or the willingness of tax payments.”
Schneider is not surprised that many people work black. It is a work on the black “tax rebellion of a small man” for him. It is not working, he says, about the great tax of taxes. “At the teachers, these are private classes or instructions, in the ceramician is the ‘in the black’ coated bathroom.”
If the tax burden is high, but the services provided by a high-level state, it can still be accepted, is considered a Schneider. “But in Germany, we have a situation where taxes and contributions are very high, and what the state in return offers in many segments is extremely unsatisfactory.”
“A small man’s tax rebellion”
In times when unemployment increases, when there are fewer orders and no overtime, when they shorten working hours and shifts – then, SCHneider says, performing work time on black. They are affected say: Now I have less money, but I still want to go on vacation or afford something. The easiest way to make up for it is black work. “And I’ve just looked at that for more than 40 years. When the economy weakens, the gray economy is blooming.”
Lukrative combination of social assistance and black work
Critics claim that high social benefits in Germany encourage black work. After social assistance 1. January 2024. increased by more than twelve percent, according to Schneider’s data, “approximately 88,000 to 100,000 people left their terms with part time – precisely those jobs that we desperately seek workforce.”
More than a third of the federal budget is already standing out for the work sector and social benefits. For 2025. The year of Minister of Labor Bärbel BAS, according to the data of the Bundestag, envisions expenditurs for social assistance from almost 52 billion euros – about five billion more than the previous year. Of these, about 29.6 billion euros are intended for monthly payments in the name of 5.64 million users. About 13 billion euros are planned for housing and heating costs, and the rest goes to integration measures and administrative costs.
The cost of the cost is in full swing: Federal Chancellor Friedrich Merz (CDU) has proposed limiting a cash supply for rent and housing social assistance beneficiaries called Bürgergeld, which sharply criticized parts of the SPD and the opposition.
In the meantime, the Minister of the BAS herself, which the Social Democracy, acknowledged that state aid attracts both criminals. In an interview for the magazine “Stern”, she spoke about “mafia structures,” when it comes to social scams. She described the exploiting structure, which lead people from abroad to Germany. There, criminals employ them in black, while at the same time they apply for social assistance.
“Private Model Combined Earnings”
Markus Karbaum has often encountered this combination of work on black and social fraud. As a consultant, which in the area of Berlin provides training to job beneficiaries, it is a mixture of legal assistance, black and bürgergelda work “private model of combined earnings”.
There are employers, who offer their employees too little hours to be able to live normally from it, says Karbaum in a conversation for DW. The private combination consists of three components: regular working hours or mini-work, in black and in the sectors such as gastronomy, where it is common – and employed advice to the employee, take from employment bureau. ” These are the three components of the system, which carbaum has often seen in practice.
“Structural scam”
There is also a certain feeling of “rights,” the Karbaum is added. “I have the right to social assistance. Don’t take that right now. That’s how that mentality could describe.”
He met people who come to training by car, have the latest smartphone and tell him once a year – what the employment bureau formally allows – with the whole family going on vacation abroad. It is formally not provided for the recipients of the social assistance Bürgergeld, “but in practice it happens. It is about individual cases, not about most,” Karbaum emphasizes. “But still happening, it is certainly an indicator that it is a structural deception.”
In order to act against this, a higher data exchange is needed, Karbaum says. It is planned by the Government Coalition – for example, a better insight between the employment and customs administration bureau, which is in charge of combating black work.
Friedrich Schneider agrees with that. But after 40 years of scientific analysis, the economist from Linz knows that the key thing is: “If we have strong economic growth and black work,” writes Dw.
(Vijesti.ba)
