Underground Economy

The recent fanfare over the "illegal" hiring practices of attorney general candidates Zoe Baird and Kimba Wood strikes a sore point for American workers concerned with maintaining jobs and working conditions.

Rather than spend our tax dollars on drug prevention among teenagers and rehabilitation for those unfortunates who are already addicted, policy makers continue to spend billions on a war on drugs that was lost before it began. Broken families, street crime and bloated prisons are the residue of that failed undertaking. Superior Court Judge James P. Gray and his admonition that the decriminalization of drugs would reverse an escalating plague is a voice of reason ("Orange County Voices," Sept.

In light of the current controversy over immigration, I was astounded at the editorial titled "Day Laborers Get a Place to Congregate" (May 28). The editorial explained how Huntington Beach, following the lead of other Orange County cities, was establishing a job center for day laborers. What perplexed me was that the writer at no time indicated who these day laborers were. It appears that The Times and many of our politicians, including Gov. Wilson, are unwilling to face the fact that immigrants make a significant contribution to the underground economy of California.

In a concerted crackdown on California's thriving underground economy, state and federal agencies are launching an investigation of payroll fraud in the state's construction industry, authorities said Friday. Spurred by reports of tax evasion and lack of employee safeguards in the construction business, the California Employment Development Department and the Internal Revenue Service have focused on dry wall contractors as their first target. Framing and roofing contractors, they say, will be next.

The article "Wheeling and Dealing" (Feb. 2) paints a romantic picture of street vendors selling on street corners, implying they are all good, honest and hard-working people trying to do a decent day's work. This picture is far from the truth. In reality they compete with merchants who have invested in businesses within the community, getting all the necessary licenses and meeting all the codes. Usually these street vendors contribute to the underground economy, paying no taxes on the money they make.

Dec. 22, 2003, 3:45 p.m., Borders Books & Music, Hollywood -- A striking scissors-toting man in a cowboy hat is escorted out of the ladies' room by two bookstore employees. An attractive brunet in her 20s, clad in a black salon cape, trails sheepishly behind him. Guerrilla hairdresser Kanu Saul has once again been busted. The only evidence he leaves behind is a small, neat pile of locks on the bathroom floor.

When authorities decided to clean up this town, they didn't take any chances. Police swooped in just before midnight, armed with riot gear and backhoes. The invaders were repelled, the streets reduced to rubble. A sneak attack to eradicate drug dealers? Gang members? Armed insurgents? No, municipal leaders were uprooting sidewalk vendors, mostly women and senior citizens, whose makeshift taco stands and clothing stalls were clogging the city center.

LIKE THE CITY ITSELF, THE economy of Los Angeles is marked by informality. And it's getting more casual. The number of recorded workers in legitimate businesses in Los Angeles is lower now than in 1990. More people are working, but not in the formal economy. That statistic comes from Dan Flaming, president of the Economic Roundtable, which was the partner of the Milken Institute in a recently completed project that studied the L.A. economy.

It sure is comforting to see that Bob Myers is back lecturing to the Santa Monica City Council about their constitutional duty to let the homeless roam our streets (Westside Watch, Sept. 11). Myers should clearly take pride in all the help he and his Lawyers Guild chums provide for the homeless: keeping them on our streets running rampant over the rights of the majority to enjoy public property it maintains by payment of taxes. Ah, yes, the homeless "advocates" will provide anecdotal comment that the homeless pay taxes, too. And that's what it is . . . anecdotal.

Officially, California's gross state product is $717 billion, unemployment is 7.7% and 3.8 million Californians live below the poverty line. But we also know one more thing: Those figures are wrong, because what no one knows for sure is the effect of the state's underground economy. We do know--or we strongly suspect--that California's unreported sector is growing.