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1 Cash-in-Hand Work
2 Previous books by author A HELPING HAND: Harnessing Self-help to Combat Social Exclusion (with J. Windebank) ALTERNATIVE ECONOMIC SPACES (co-edited with A. Leyshon and R. Lee) BRIDGES INTO WORK? AN EVALUATION OF LOCAL EXCHANGE AND TRADING SCHEMES (LETS) (with T. Aldridge, R. Lee, A. Leyshon, N. Thrift and J. Tooke) COMMUNITY SELF-HELP (with D. Burns and J. Windebank) CONSUMER SERVICES AND ECONOMIC DEVELOPMENT CORPORATE CITY? PARTNERSHIP, PARTICIPATION AND PARTITION IN URBAN DEVELOPMENT IN LEEDS (co-editor with G. Haughton) EXAMINING THE NATURE OF DOMESTIC LABOUR INFORMAL EMPLOYMENT IN THE ADVANCED ECONOMIES: Implications for Work and Welfare (with J. Windebank) PERSPECTIVES TOWARDS SUSTAINABLE ENVIRONMENTAL DEVELOPMENT (co-editor with G. Haughton) POVERTY AND THE THIRD WAY (with J. Windebank) REVITALISING DEPRIVED URBAN NEIGHBOURHOODS: An Assisted Self-help Approach (with J. Windebank)
3 Cash-in-Hand Work The Underground Sector and The Hidden Economy of Favours Colin C. Williams University of Leicester
4 Colin Williams 2004 Softcover reprint of the hardcover 1st edition All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act First published 2004 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin s Press, LLC and of Palgrave Macmillan Ltd. Macmillan is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN ISBN (ebook) DOI / This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Williams, Colin C., 1961 Cash-in-hand work: the underground sector and the hidden economy of favours / Colin C. Williams. p. cm. Includes bibliographical references and index. 1. Informal sector (Economics) Evaluation. 2. Cash transactions. 3. Social exchange. 4. Social capital (Sociology) 5. Informal sector (Economics) Government policy. I. Title: The underground sector and the hidden economy of favours. II. Title: Hidden economy of favours. III. Title. HD W dc
5 This book is dedicated to Jan and Toby
6 This page intentionally left blank
7 Contents List of Tables Acknowledgements viii x 1 Introduction 1 Part I Examining Cash-in-hand Work: Theory and Methods 13 2 Theorising Cash-in-hand Work 15 3 Methodologies for Measuring Cash-in-hand Work 40 Part II Socio-spatial Variations in the Nature of Cash-in-hand Work 63 4 Employment Status and Cash-in-hand Work 65 5 Gender Variations in Cash-in-hand Work 84 6 Geographical Variations in Cash-in-hand Work 106 Part III Evaluating the Implications of the Policy Options Deterring Cash-in-hand Work A Laissez-Faire Approach Harnessing Cash-in-hand Work Conclusions 198 References 207 Index 230 vii
8 List of Tables 1.1 Adjectives and nouns used to denote cash-in-hand work Character of suppliers of cash-in-hand work in English localities Motives of purchasers of cash-in-hand work in English localities Motives of suppliers of cash-in-hand work in English localities List of tasks investigated in the English Localities Survey Overview of areas studied in the English Localities Survey Proportion of cash-in-hand work conducted by the employed and non-employed in England Wage rates for cash-in-hand work in Quebec region: by employment status, 1993 and Mean wage rate for cash-in-hand work in England: by employment status of individuals and households Types of cash-in-hand work of the registered unemployed and employed in English areas: by nature of customer Reasons for engaging in cash-in-hand work in English localities: by employment status Motives of employers when using unemployed and employed cash-in-hand workers Cash-in-hand wage rates in three regions of Canada: by gender, Relationship between gender divisions of cash-in-hand work and unpaid domestic work in England: by task Average hourly wage rates in second-jobs, Germany Motives of suppliers of cash-in-hand work in English localities: by gender Motives of purchasers of cash-in-hand work in English localities: by gender Estimates of the magnitude of cash-in-hand work obtained through indirect methods Percentage of everyday tasks undertaken using cash-in-hand work in England: by locality-type Participation in cash-in-hand work in England: by area Suppliers of cash-in-hand labour in lower- and higher-income English neighbourhoods: by socio-economic status Character of suppliers of cash-in-hand work in England: by area-type Motives for employing cash-in-hand workers in England: by type of area Motives of suppliers of cash-in-hand work in English localities 123 viii
9 List of Tables ix 6.8 Spatial variations in the extent of participation in formal and informal community involvement: by Index of Deprivation Regional variations in the extent of formal and informal community involvement, in the United Kingdom Benefit overpayments due to fraudulent failure to declare earnings Labour force participation rates, 1960, 1973 and Expenditure on social protection as a percentage of GDP in European Union nations, 1993 and The polarisation of employment between households, OECD Nations, The 12 steps to formalisation of cash-in-hand work of Street (UK) 186
10 Acknowledgements This book reports the findings of five separate but inter-related research projects conducted over the past five years. The English Localities Survey reported in this book that examines cash-in-hand work in deprived and affluent English urban and rural localities is the cumulative result of three grants. The Joseph Rowntree Foundation funded the study of urban lower-income neighbourhoods as part of its programme of research and innovative development projects, which it hopes will be of value to policy makers and practitioners. The facts presented and views expressed in this book, however, are those of the author and not necessarily those of the Foundation. The author would also like to thank Jan Windebank who co-authored the final report on this project as well as Stephen Hughes who provided the research assistance to bring this study to fruition. The data set on higher-income urban neighbourhoods, meanwhile, was funded in part by the European Commission s DG12 under its Targeted Socio-Economic Research (TSER) programme. This evidence was collected as part of a project entitled Inclusion through Participation (INPART). In this regard, the author would like to thank Rik van Berkel who managed the six-nation project team as well as the other European partners. In particular, I would like to thank my UK colleagues, namely Maurice Roche and Jo Cooke, without whom this data could not have been collected. The third data set on rural localities arose out of a project funded by The Countryside Agency. I would like to take this opportunity to thank them for funding this project on mutual aid in rural areas as well as to display my gratitude to Richard White and Theresa Aldridge for their energetic and enthusiastic research assistance. Many of the ideas on cash-in-hand work developed in this book were first tried and tested in the context of a twelve-nation project funded by the European Commission s Targeted Socio-Economic Research programme entitled Comparative Social Inclusion Policy and Citizenship in Europe: towards a new social model. The regular and enjoyable meetings with the partners from other European Union nations enabled me to forge my ideas in a way that would not otherwise have been possible. In this regard, I would like to thank the following people in particular x
11 Acknowledgements xi for their inputs: Claire Ainesley, Rik van Berkel, Soledad Garcia, Henning Hansen, Pedro Hespanha, Iver Hornemann-Møller, Angelika Kofler, Jens Lind, Enzo Mingione, Maurice Roche, David Smith, Ben Valkenburg, Jacques Vilrokx and Enid Wistrich. Although they will doubtless take issue with many of the ideas in this book, their interventions and inputs have played a large part in helping me develop the ideas conveyed herein. The fifth and final source of funding that has fuelled the ideas expressed here was the Economic and Social Research Council (ESRC) grant Evaluating Local Exchange and Trading Schemes as a tool for combating social exclusion (R ). This was carried out in collaboration with Theresa Aldridge, Roger Lee, Andrew Leyshon, Nigel Thrift and Jane Tooke. I would like to take this opportunity to thank all of my co-partners in this project as well as the respondents who gave their time freely and committed far more to this project than could have been expected. This book was completed during a period of study leave from the University of Leicester, for which I am very grateful to the University. As always, however, the normal disclaimers apply.
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