Shadow Boxing

How does one approach the problem of a shadow economy? What is the solution that will bring workers out of the shadows?

On Wednesday in Berlin, Schröder's cabinet will try to devise a plan to close loopholes that allow East Europeans to work for a small fraction of what their German colleagues earn - both legally and illegally.

Those irresponsible East Europeans again, working for non union wages, don’t they know that they are undermining social solidarity? Perhaps a minimum wage is in order?

Germany has no general minimum wage because such a law was long considered to be an infringement on the right of companies and unions to set their own pay scales. But one was passed for the construction industry in 1996, after a building boom in the early 1990s drew a wave of illegal workers.

So in order to combat illegal workers you set a minimum wage? Who was their economic advisor George Monbiot? Polly Toynbee? Just a small idea from a non expert I admit, but if a worker didn’t cost an employer almost twice his take home wage, I think the problem would decrease. It’s the Taxes Stupid.