Explaining Southern California's economy

California's underground economy: The cost of doing business in the state

Cleaning services are vulnerable to the underground economy and price competition.

How much does the "underground economy" cost California every year in lost tax revenue? A whopping $7 billion, according to LA Times

A recent review of records from nearly 1,500 employers revealed that nearly a third lacked legally required workers' compensation insurance coverage to pay the medical bills of employees hurt on the job, Baker said.

Many of those workers seek treatment at hospital emergency rooms, a burden that ultimately falls on insured patients and taxpayers. They also seek benefits from state workers' compensation courts and money that comes from a special state fund that passes the costs along to law-abiding employers. Off-the-books laborers likewise don't pay income taxes, while their employers avoid payroll taxes to fund unemployment insurance benefits.

Bottom line: Tax-paying companies, consumers and taxpayers are stuck paying the bill for cheats.

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