Journal of Rural Community Psychology Volume E8 Number 2 Fall 2005
Informal Economic Activity in a Deindustrialized Rural
Pennsylvania Community: A Preliminary Profile
Eric D. Cohen and Andrea Stephens
Penn State Fayette, The Eberly Campus
This paper reviews the relevant literature on informal economies, particularly their emergence and proliferation in declining Appalachian and de-industrialized sections of the United States. A descriptive, ethnographic profile of salient examples of informal economic activity, both licit and illicit, is presented on a deindustrialized region of Central Appalachia, “Fayette County,” the southernmost, and poorest area in the southwestern Pennsylvania region.
In many Appalachian communities and other de-industrialized areas of the Northeastern United States, several decades ago poor folks had the potential to move out, anticipate a job in the coal mines or steel plant, and gain entry into the blue collar middle class. Up until the 1970s employment in extractive industries and manufacturing was still viable in poor areas and it was quite possible for folks to stay in the area and make a decent life based on living standards considered acceptable for the region. Today there are few well paying jobs for unskilled and semi-skilled workers who are barely literate because of poor schools and poor communities. Many in these communities stay at home in marginal circumstances, piecing together incomes from day work, odd jobs, part-time work, housecleaning and baby sitting, illicit activities and whatever welfare or disability benefits they can gain access to. The development or evolution of an “informal economy” is an unintended consequence of these patterns, and tends to emerge as an alternative economic form to systematic, structurally determined unemployment and underemployment in the formal low wage service economy for many in the community.
The material in this paper is based on ethnographic methods conducted by both authors over a several year period. Both authors played the role of “participant-observer” in various cultural domains in Fayette county where people tend to be more inclined to participate in informal economic activity as a “way of life,” and discussions of such activities tend to be more socially acceptable. This included: River subcultures associated with the Yough river; various outdoor “hippie-oriented” musical venues in the area; working class bars in the area; and other domains which cater to more working class folks in the region. Informal social networks associated with these subcultures, elicited through naturalistic involvements in these various groups, facilitated many of the understandings developed in this paper. Other detailed understandings came from the hundreds of students I have taught over my almost eight years teaching sociology at Penn State-Fayette. As part of their biographical and regional “self-study” in my sociology classes students provided a wealth of information on informal work. Students in the more advanced sociology of deviance courses are required to apply conceptual material in the course to aspects of their own lives, which includes primary group networks engaged in a variety of licit and illicit underground activities as a part of their overall economic subsistence strategies.
As part of the overall research strategy, a combination of semi-structured and unstructured interviewing techniques were utilized. Many of the general interviews were conducted “informally” in various community settings. As part of the natural flow of interaction and verbal exchange people talked about how they survived economically at an everyday life level. Informal work appeared to be a normal part of the subsistence strategies for many people we encountered. The case profiles conducted by the second author involved more systematic semi-structured interviewing techniques and several were tape recorded. Interviews were conducted with a total of 20 people. We present information on five individuals, three male and two females, which we feel best represents the typical backgrounds and informal work patterns of working poor people in the region. All of the primary interviewees are from Connellsville, the second largest town in Fayette county. Based on our years living and interacting with people from all across Fayette county (nine years for myself, Andrea is a local) we feel that this group more or less represents the typical working poor folks in the county, particularly those living in “semi-urban” or “shallow rural” areas in the region (which represents population-wise most of the county).
Review of the Relevant Literature
Most studies of the economies in Appalachia have focused on economic activity that involves a “formal” reality including reported, regulated, or waged labor. A focus on the formal economy overlooks the pervasive influence of informal work in regions of Central Appalachia that are rural and persistently poor. Many households in this region of the state often employ multiple economic strategies to survive, particularly in the face of the dominance of low-wage work in a predominantly service economic form. A recent literature has emerged which addresses the problem of informal economies in the central and southern Appalachian region. There exists some research focusing on Appalachia which recognizes the multiple and diverse aspects of informal activities in order to develop a broader definition of the informal economy which has been traditionally used in the literature ( Halperin, 1996; Mencken and Maggard,1999; Jenson et al, 1995).
As part of a community adaptation strategy to a low wage service-based economy, many rural individuals and families are likely to turn to non-formal types of production for subsistence (Jenson et al, 1995;Mencken and Maggard, 1999). This is particularly the case in regions where informal economic activity has been socially accepted even during periods of relative formal economic prosperity. The cultural and historical roots of underground economies links to various Appalachian cultural forms and the state of viable formal economies in the region. Conceptually informal economic involvements are part of an overall subsistence strategy that economically stressed individuals and households use to augment income in a de-industrialized economy (e.g. dominated by low wage service work), and where economic opportunities of the past such as coal and steel, are no longer viable.
In a survey of 521 West Virginia households, Mencken and Maggard (1999) found that almost 22 % of the households sampled reported some form of informal activity for exchange or income. This percentage was less significant than the 56 percent of households sampled in the Jenson et al study and other research focusing on Kentucky households where there was a 49 percent response rate (Wood & Tickamyer, 1995). Some of the more salient informal economic activities that West Virginia households reported included: handiwork/home repair, personal services, crafts/sewing, and yard work. One of their main findings was that very few of the survey respondents substituted informal economic activity for formal activity (very few of their households reported depending on these activities for a substantial proportion of income). This finding was linked with the author’s speculation that informal economic activities are seen as an adaptation strategy to the exigencies of a lower wage, service based formal economy.
They also concluded that economic status of the household is an important determinant of which households tend to participate in informal economic activity. It is the “near poor” versus the poorest sectors of the community who tend to be more involved in this type of activity.
Many rural sociologists have concluded that participation in informal economies is widespread and is directly related to a region’s rurality as well as the restructuring of local economies (Jenson et al, 1995, Mencken and Maggard, 1999; Halperin, 1996). Jenson et al (1995) found that access to rural resources, such as land and outbuildings, shapes one’s ability to engage in the informal economy. It is possible that the poorest members of the community are not always the ones who can rely on informal work but instead the near poor. Some researchers argue that informal economic strategies allow households to replace lost wages within mining, timber and manufacturing as well as to supplement the relatively low wages earned within the region’s rising service economy (Mencken and Maggard, 1999).
Fayette County’s Economic Transformation (1950-2000)
Fayette county is a predominantly rural county in the southwestern region of Pennsylvania bordering West Virginia and Maryland, is one of the poorest central Appalachian communities. For the last five decades, Fayette has been plagued by persistently high rates of low income families and individuals, high rates of unemployment and underemployment, working poor populations, and a very high percentage of people receiving public assistance and disability. Fayette also has one of the lowest rates of people attending and completing college in the state which suggests a population without any real hope of systematic social mobility. Fayette has been in a state of economic depression since the coal and steel industries, which once sustained the community and allowed it to flourish continued in a downward spiral. In addition significant declines in manufacturing over the last two decades help establish the social and economic backdrop fro understanding Fayette county today. The present economic base consists mainly of service economy jobs, predominantly in the human service, retail, food, and tourist industries.
While the prevalence of a mixed economic form has been commonplace in Fayette County in the 20th century the utilization of this practice correlates to the declines in well-paying jobs over the last five decades. As high wage blue-collar jobs have left the area because of de-industrialization and the globalization of the economy, local populations have found it necessary to become involved in the emergent informal economy. This participation is either of a mixed economic form where an individual augments their full-time minimum wage job with part-time “informal” work or people who are almost completely embedded in this type of “invisible” work.
The growth of economic infrastructure in Fayette County over the last thirty years is largely associated with retail and predominantly low wage service economies. This helps establish the backdrop for interpreting the growth and proliferation of an embedded informal economy in the region. Discount department stores, Dollar stores, discount food stores, Walmart, drug stores, fast food establishments, working class bars, and low budget, “family” restaurants appear to be the only real definable emergent economic growth in Fayette County. This is correspondent to the needs of a largely working poor, lower middle class, and working class population base. Small business startups have increased in the last decade partly as a result of Eberly’s Fay-Penn initiative and their support of loans to small businesses. While the small business economy in the region has become a significant proportion of total economic growth, their failure rate is still very high, particularly in sub-regions of the county which have been persistently poor for several decades. While small businesses of less than 30 employees seem to dominate economic life in the region they typically offer lower wages and offer few or no employee benefits.
Informal Economy and Persistent Poverty
Persistent and chronic poverty along with persistent underemployment and divergence from a high wage labor market drives a pervasive and powerful underground economy in Fayette County. This is another “tip of the iceberg” scenario in that what the common observer sees in terms of people they know who work “off the books” is probably enormous relative to its density in the eyes of official estimates. In fact in some of the social circles I move through in the county, the people who are not part of this economy at some level are in the clear minority. Many people who live in Fayette County are completely embedded in such an economy and are virtually invisible to the formal, visible “official” economy. Many co-exist between two worlds, low wage subsistence in the formal economy and some involvement in informal economic activity “as it comes up” as one informant confided. Sometimes this activity takes the form of “true” illicit activity such as growing marijuana, selling marijuana, gambling, or small-time retail theft, which includes selling “hot” items.. It is also the case that many jobs in the region are informal by nature, or exist as normal “off the books” employment (by community standards) such as bartending or dishwashing at restaurants and bars. There appears to be a significant amount of social acceptance regarding working outside the purview of Uncle Sam. This is part due to the Appalachian legacy of anti-government and independence which still culturally permeates much of the region. It also relates to a hardscrabble orientation where subsistence becomes the primary adaptation initiative and most informal work is viewed as a significant climb above real “illegal” work where the formal sanctions against such activities are viewed as much more serious than informal economic activity.
While Fayette County’s unemployment rate is significantly higher than the region and the state (around 9% vs. 5-6%), working poverty defines poverty in this area. Most people work, many more than one job, yet in jobs which are typically part-time and incur no benefits or investment in their future. Most jobs in the region are for the unskilled wage earner and most of these are in the low wage sectors such as personal services or retail. The majority of these jobs pay less than $8 hour at entry level which is difficult to live off of whether an individual or family. According to the most recent census, almost half of the reporting households earned $25,000 per year or less before taxes. This is somewhat of an improvement from the 62% reported for the 1990 census. This of course does not include money made in the informal economy, and working poor people appear to have significant involvement in such activities based on all my informants and resources. What the census data translates into is one or more adults typically working one or more low wage, part-time jobs, perhaps in “off” hours which also affects their childcare needs. Most of these jobs, either formal or informal, offer no benefits, retirement plans, or long term security. The long-term implications of such an economic reality are disastrous for the community and portend (independent of a significant out-migration of residents which is unlikely) a critical mass of individuals and families going into their old age without retirement plans, savings, or financial resources for survival.
Informal Economy and Marijuana Production in Fayette
The range of participation in this informal economy includes bartering goods and services, such as deer meat or firewood for borrowing a truck, to involvement in various aspects of the underground economy such as bartending, house painting, helping out as a laborer at a construction site, wood cutting, musical gigs in bars, to housecleaning and babysitting which are predominantly women’s work. The sale of such local items as ginseng roots, wild mushrooms, moonshine, and locally grown marijuana are also part of this economy. Domestically grown marijuana in Fayette County, particularly the mountainous regions in the area is big business and is widespread in the region. The growth of locally grown marijuana in Appalachian regions is becoming an emergent research area and is definitely worthy of further study particularly as it pertains to its place in the informal economy (Weisheit, 1992; Clayton, 1995; Wilkinson, 2001).
What has replaced moonshine in terms of its involvement in the mountain informal economy is the growth and distribution of domestically grown marijuana. Based on information from local informants in several of the mountainous areas in Fayette County, as well as my own ethnographic data on the local pot economy I have ascertained that this “hidden” industry is pervasive, participated in by people in various walks of life, and largely ignored by local cultures and law enforcement personnel. The aphorism “out of sight, out of mind,” and the common understanding that people do what they need to do to survive and pot, relatively speaking is not so harmful, are part of the cultural backdrop which appears complacent to such behaviors.
Most of the growers I have become acquainted with are small time producers of marijuana, either growing in discrete and isolated outdoor plots deep in the woods or hydroponically (without soil) in a dwelling or outbuilding on ones own property. Most growing operations I have heard about involve 50 plants or less and many are under 10. This means that any sales or bartering of pot which may occur typically goes on within a small group of people, typically those within ones primary group. There are a few of what locals in the pot culture refer to as “guerilla growers” meaning they grow a large number of plants for distribution in the local and perhaps regional pot economy. This typically involves 50 or more plants yet I have heard of growing operations with over 100 mature plants. Because of the severe penalties for pot manufacturing and distribution in PA (50 plants is the number for high level manufacturing and production offenses and is a serious felony) most growers stay to a smaller number. Most know the drug laws of the state well, have themselves been busted or know close friends who have been busted, and are unwilling to take the chance for larger scale pot production.
Several years ago an older student who herself and her boyfriend were involved in the local pot scene, did a study of pot dealers she knew in the area for a paper in an advanced drug seminar I taught at the campus. There were eight different dealers in Ethnographic data from the mountains where I live have ascertained similar conclusions her study which included people who grew pot for distribution as well as those who sold pot brought in from outside the region. A few of the growers she interviewed were older men who had been employed in the once thriving and relatively high wage steel industry which employed many from Fayette county up until the early 1980s. They stated that because of the loss of good jobs (high wage and benefits) in the area they were relegated to jobs which paid sometimes half of what they made in the steel mills. Growing and selling small amounts of pot represented a way to supplant the wages they would have garnered in the steel foundry. It was rare that any of the interviewed dealers made more than $20,000 selling pot and most reported making $10,000 or less yearly. They stated that this reduced the risk they incurred in conducting an illegal enterprise. An ethic of simplicity was also involved in their decision-making in that the sentiment expressed by one dealer which more or less represents the point of view of all the men, “I didn’t want to be greedy, I just wanted to make the $35-40,000 I was accustomed to from my job at the mill.” This simple non-greedy orientation towards material acquisition is relatively common in the region and has its roots and parallels in earlier Appalachian cultural traditions rooted in the Fayette county mountainous regions. Earlier characterizations of Appalachian people who want little materially and live relatively simple lives (at least materially) in the mountains draws on consistent interpretations of Appalachian people by many different writers (Fetterman, 1974; Erikson, 1976).
Informal Economic Activity in Fayette County
Usually income garnished from these informal modes of work is incorporated into some part-time work in the formal economy, or supplemental income from disability or welfare. This is fairly typical in Fayette County and is correlated to the wider impact of work and community in a deindustrialized economy. People living in the more mountainous communities in the area appear to be more prone to this kind of mix of formal and informal economic realities. This is perhaps related to entrenched norms associated with bartering and informal work which have a long legacy in Appalachian communities (Fetterman, 1970). In a recent expose in Pittsburgh’s main newspaper focusing on poverty in Fayette County, the nature of this form of informal economy was expressed through examination of one mountain family (Stack, 2000). Part of their intent was to interface the reality of persistent poverty and welfare with the hardscrabble existence in mountainous rural communities.
Many welfare families in the local mountains augment their welfare checks with involvement in the local informal economy. This may include baby-sitting, house cleaning, woodcutting, yard work, home repair, or selling a few jars of homemade jelly or anything else locally grown. This form of subsistence survival is, according to several informants in the area and my own observations, very common in the mountainous regions of Fayette County, as well as the smaller communities throughout Fayette.
Various survival strategies within the local informal economy intertwine with changes in welfare policy, and the availability of income to meet one’s family or personal needs. It is likely that the pervasiveness and density of Fayette’s informal economy is directly correspondent to the declines in high wage jobs in extractive economies and manufacturing over the last five decades. Certain forms of this underground economy also have their legacy in the social patterns of Appalachian cultures, which have deep roots in many areas of Fayette County. Fayette (and its neighboring Greene county) could be considered the northernmost point of Appalachia (culturally and socio-economically rather than geographically). Both communities border West Virginia and like many West Virginian counties, have been plagued by persistent poverty and its correspondent social ills, and have been targeted by the U.S. Census as “distressed” rural communities for over four decades. While the range of activities that make up this informal economy is fairly well accepted by locals in the area, its extent and its various configurations is poorly understood.
In this sense a subsistence style economy, a sub-variant of the rural culture of poverty conceptualization becomes a “caked” culture with all of its negative manifestations. Thus informal economies if they become normalized with a significant subcultural adherence tend to perpetuate themselves and predispose certain people away from more “formal” economic commitments. This pattern assumes a critical mass of people who for whatever reason find “informal” work, with its concomitant control and anti-authority implications (again cultural indicators associated with characterizations of Appalachian culture) appealing..
Informal economies or subsistence economies may be a result of the “strain” associated with a large density of working age adults with limited local employment opportunity, the incongruence between work expectations and work realities, or an artifact of a community plagued by persistent underemployment.
Type of region or to the extent that a region is particularly rural or mountainous is important in demarcating the kinds of informal economic activities which can occur. “Deep rural” (Halperin, 1990) mountainous areas establish different rural cultural domains which affect everyday life. Activities such as growing marijuana outdoors and poaching deer to sell the meat can only occur in very rural settings with any kind of frequency. Deep rural mountain cultures appear to even be distinct from deep rural environments in the valleys of the region. Isolation from mainstream society is the most important characteristic in differentiating deep rural, mountainous informal cultures from other rural or small-town settings in the region.
Semi-urban places like Uniontown and Connellsville offer significant opportunity for more quasi-urban based activities ranging from a large density of “under the table” work in bars and convenience stores to the proliferation of used car sales, home-based auto repair and bodywork, and “perpetual” yard sales. By all accounts, the used car industry in this area is enormous. This would be expected given the density of working class and working poor people here. Used car dealers seem to pop up all over the area, ranging from trailer-based dealers with a handful of cars to larger dealers with over 100 cars on their lot. It is my understanding, based on communications with several local informants, that most of the smaller used car dealers operate in the main within the local informal economy. The only requirement to open a used car dealership is having access to a lot and a $25 fee paid to the county treasurer. While car dealers can be found almost anywhere in the county, even small house-based operations on some of the rural secondary roads in the region, they are more commonly located along the main roads in Uniontown and Connellsville. For example, along the stretch of road connecting Connellsville and Uniontown, known as Route 119 or “Connellsville Street”, a section roughly six or seven miles in length, I counted 19 separate used car dealerships. The section of 119 in Connellsville which runs north to the larger town of Greensburg in Westmoreland County, there exists no less than 30 used car dealers, ranging from dealers with a few cars to those with many automobiles. It appears that almost all of the available space on either side of the road is reserved for selling and buying cars and trucks. Most of these dealers operate at some level within the local informal economy. Some are just “invisible” dealers who regularly go to local car auctions (which are abundant) and have a small lot of 5-10 cars on a small piece of roadside land provided by friends and family. This same patterns exists for the local fruit and vegetable stands which emerge during the summer and fall along many of the highways in the region. Even when Uncle Sam is aware of a car purchase buyers and sellers often work together to negotiate a real price versus a “paper” price which is often widely different yet serves the needs of both parties. Used car dealers appear to do well in Fayette county because a large proportion of the local population is either cash poor or has bad credit which keeps them from procuring a car loan or lease legitimately.
Fayette County Case Studies
The following case vignettes represent “typical” examples of informal work among working class or “working poor” people in Fayette County. We present five different expressions of people engaged in the local informal economy in different capacities four men and one woman. These individuals are mainly from “Connellsville,” the second largest community in Fayette, a river town of roughly 12,000 people. From our experiences and informants, informal economic activity is more typical among working class or working poor people rather than the most destitute in the community. It also represents a more mixed economic adaptation in that many people also work a proportion of their time in the more legitimate “formal” economy, typically in low wage jobs in the local service economy. While some people are completely embedded in informal economic activity, the mixed adaptation is more common for both men and women in the community.
Case #1. G., a 46 year old single white man with a high school education. He has been working under the table since 1988 to supplement his regular income from assorted jobs he has held. From 1988 until 1991 when he became unable to work, G has worked over the table in construction, plastering and swimming pool installation. During that time he also worked under the table on some weekdays and weekends as a bartender and short order cook. Since going on disability in 1991, he has not done any work that was not under the table. After he was able to work again in a limited fashion, he has supplemented his monthly disability check by up to 33% with working under the table. He has held many other positions, mostly labor jobs such as plasterer, construction worker, electrician, foreman, plumber, and machine operator. G. also supplements his income by doing household chores for his grandmother, who lives nearby. She also has G. do some chores for her friends who need outdoor chores tended to, such as window washing and grass cutting. He says he never furthered his education because he did not have the money to do so, and he will continue to work under the table to finance his marijuana smoking.
Case #2. J. is a 43 year old divorced white male with an Associates Degree in Marketing Management and 4 years armed forces experience. He has 2 children and will not owe any child support by the time he is 50. His ex-wife was the primary breadwinner in the family and after their divorce the child support payments he was required to pay ate into his earnings so deeply that he felt compelled to start looking for work under the table so he could afford to live. He has been working under the table either solely or to supplement his income since 1995. From 1995 to 1997 he worked a fulltime job as a paint salesman 48 hours a week. He also worked two delivery jobs (delivery for a restaurant and bartender usually two to three nights a week per job). When J.’s father passed away, he moved in with his mother in his hometown and commuted to his jobs. When his car would not make the trip any longer, he got a job as a cook at a local diner and worked there for two years. During this two-year period he did not work under the table at all. Eventually he lost the job, and used all his unemployment benefits before going to work under the table helping a local contractor with construction work. With winter coming, he has started at two local fast food restaurants as a part time cook, but once winter is over, he would like to resume his under the table job while receiving unemployment. When I first interviewed J in the summer of 2003, he had no serious plans for the future, and told me he just lives from day to day, or paycheck to paycheck. Since then, his mother has decided to sell the house and is moving into a retirement apartment. J is now looking for a place to live of his own and hoping to finance this move with revenues from the large yard sale he is orchestrating for a fall weekend. J. would be considered a member of the underemployed working poor if he worked steadily, but could more succinctly be described as a member of the underclass because of his fragmented work history.
Case #3. D. is a while forty year old male with three children who live with their mother. He has been divorced for five years. He is a paid fireman, and has an income of approximately $46,000 a year. He supplements his income by working as a bartender at the local fireman’s club. He estimates that he earns an extra $2000.00 a year in this way. Until D became a firefighter, he worked as a construction laborer, exclusively under the table. In his family, unreported income and bartering has been a way of life for as long as he can remember. D.’s family runs a beer distributor, and since he was a boy he can remember people cleaning their house for $20.00 and a case of beer. Anyone who was receiving food stamps and wanted to sell them could get cash for them from his mother at the distributors provided “there was food on the table for the children”. Firewood was delivered to their house each winter for cases of beer. This was the case for painting and lawn work also. D. lives a comfortable enough life in Fayette County, and expects that he will always be both a member and supporter of the informal economy.
Case # 4. C. is a 37 year old white female high school graduate who is divorced. Two of her three daughters still live with her. Back when she was married, she and her husband agreed she would work at home so as to be there for her daughters on a daily basis. She supplemented up to 100% of her husbands’ income by babysitting children for cash for 14 years. Her husband works at a local factory and earns around $33,000 a year. While they were married, C’s income was as much as or more than her husbands. After their breakup, she no longer felt comfortable working under the table since her husband had threatened to report her activities to the IRS. She still watches children on a fulltime basis, and has for 4 years, but now it is all reported income. C. also receives $640.00 a month in child support. C. is eligible for food stamps, and medical assistance but does not apply for these services. She does receive LIHEAP (heating assistance) every winter and her daughters take advantage of the free lunch program. C. has parents who live nearby and frequently uses their resources for support. She does not own a vehicle, and when she needs to go somewhere, borrows one of her parents. She also relies on her parents whenever she has to pay taxes by borrowing the money and making payments to repay them. C. is considered “working poor.”
Case Study #5. N. is a white male, age fifty-two who has been married for thirty years. He has one child who no longer lives at home. N is a high school graduate who has had some college. Currently he is on disability due to prostate cancer. N. has always been steadily employed, and has many “side projects” that add an estimated four thousand unreported dollars or more to his income each year. Among the side jobs he would perform were cutting firewood and do woodworking projects on a custom order basis. When N. decided he needed a wood burning stove for his workshop, he bartered a truck for it instead of buying one. When N. recovers from his surgery, he plans to go back to work as a warden at a correctional facility and pursue his side projects to supplement his income. N. and his wife are considered working class people.
Of the male respondents described above, only one had some college experience and most only had high school degrees. This is typical of many men involved in informal work in the region based on many of the informants we communicated with. Three of the men worked in both the local low wage formal economy and the underground informal economy. One supplemented his monthly disability income with informal work such as bartending and being a short order cook, and some formal work as a construction laborer. This mixed economic form, involvement in both the formal and informal economy is also typical of many people who are “working poor” and trapped in the low wage service economy. All of the informal work in the case profiles represents low wage, unskilled labor across many different work domains. This includes: bartending, delivery driver, lawn care, woodcutting and hauling, babysitting, housepainting, and similar type of work which we label ”unskilled” and which our respondents referred to as “anything to make a buck.”
CONCLUSIONS AND POLICY IMPLICATIONS
The range of informal economic activity in Fayette County varies by region, subregion, ruralality, township, gender, and socioeconomic status yet there is some crossover between general categories. While such activity appears to be more commonplace among working poor and working class populations, some middle class people such as nurses and other mid-level service professionals in such fields such as health care and education are also involved in generating substantial income in an invisible economy. Yet I would surmise based on my observations and interviews that the frequency of involvement is associated most typically with working class or working poor people. People who do not work at all, such as disability and welfare recipients appear to be less connected than indigent people who have some connections to the formal work economy. It is relatively common for people to work a full-time or part-time “legal” job and work off the books to supplement one’s income. Many who are mired in the low wage service economy in the county are forced to develop economic adaptational strategies which typically involves some degree of informal work.
The most salient socio-economic groups in Fayette County, according to the most recent census, could be characterized as a mix of lower middle class/working class and lower class, dominated by “working poor” individuals and families. Income distributions in the area, based on census figures support this conceptualization. Based on 2000 indicators almost forty-four percent of the “formal” household income are $25,000 a year or less. Most fall under $18,000 indicating minimum wage, or near minimum wage job affiliation. Almost 60 percent of the households make $35,000 year or less. Most of the jobs that these people hold have no health care benefits or retirement plans. In the typical case it is one or more adults in the household working one or more low wage jobs in the retail or service sectors. Fayette County consistently lags way behind the Southwestern Pennsylvania region and the state in terms of per capita income, average annual wage, household income, and the distribution of household incomes (Census 2000). In fact, while there was overall improvement in the southwestern Pennsylvania region across most income-based indicators in the recent census data, the relative difference compared to the changes in other counties in the region is negligible. Across some indicators, Fayette is actually worse off proportionally across several key indicators than the differences expressed in the 1980 and 1990 census data. Across most indicators of economic distress collected by the 2000 census, Fayette County is typically double that of the average for all other counties in the region. Almost one-third of the population receives some form of welfare or disability support, indicating a large proportion of people struggling at the bottom of the distribution ladder.
Changes in welfare policy in Pennsylvania since 1998 are likely to push people further into Fayette’s informal economy. Because of the normative nature of informal work among Fayette’s poor and working class populations and its social acceptability and availability, people find this mode of work quite appealing. Embeddedness in informal work also predisposes people toward a culture of poverty because “invisible” work experience does not garnish a potential career path or resume, the ability to procure loans and mortgages, and a sustainable employment record which tends to sustain itself. By “getting over the system” many local residents find themselves trapped in a “caked” culture of poverty which tends to be transmitted from one generation to the next.
Lack of sustainable work histories and a “make do” or “just get by” attitude tends to create a surplus population of people who appear to live a marginal economic existence. They also do not contribute to the overall community infrastructure and in this sense they become a significant burden to the system, especially if they end up drawing welfare or disability benefits at the same time they earn wages in the underground economy.
While individuals may survive at a “subsistence” level, both individuals and communities suffer in the long run. Because people work in an underground economy the income that they generate is never taxed, thus it remains “invisible” to the authorities. With no steady observable employment people are denied mortgages and loans and do not contribute funds to social security. Thus setting themselves up for impoverishment during their elderly years. Communities with a high density of people engaged in the informal economy tend to persistently struggle because this revenue does not support local community resources.
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