Spaniards turning to underground economy With recession making its way, there has been an increase in unemployment rate. As a result, many people are turning to the underground economy. The article ‘Spaniards turning to underground economy’ would show how a guy ‘Juan’ from Spain earn a leaving after being laid off from his previous job. The author says that ‘As Spain's recession deepens, more workers like Juan are finding refuge in a growing underground economy’. However the Disadvantage of is that workers in the underground economy are not paying taxes and might also be collecting unemployment and social assistance benefits. It is also said that this undeclared workers are competing with their former employers, undercutting official rates for services. This paper will discuss a number of government policy and effects of unemployment and a fall in GDP. To be counted as unemployed, a person must be either without work but has made specific efforts to find a job within the previous four weeks, or waiting to be called back to a job from which he or she has been laid off, or waiting to start a new job within 30 days (Parkin, 2012). For the case of Juan and the others that turn to the underground economy they are counted as Cyclical unemployment where ‘workers is laid off because the economy is in a recession’ (Parkin, 2012). Unemployment usually leads to lost in income and production and also lost in human capital. Loss of production means a lower consumption and a lower investment in capital, which lowers the living standard. Being unemployed would sometimes lead to the workers to be depressed. With this the official unemployment figure might increase if those depressed workers figures are added on. Since the unemployment figures only covers people that are currently looking for a job or I waiting to start work or waiting to be called back to their