The Hidden Economy: Are We Poorer or Just Unaccounted For?
January 31, 2025
Okay, around 30% of the population lives below the poverty line, and 80% survive on less than 3,000 guilders per month. The minimum cost of living hovers just below that threshold. In 2011, this 80% figure was still at 60%, meaning poverty—at least on paper—has grown significantly over the past decade.
Yet, during the pandemic in 2020, something strange happened: despite economic shutdowns, the economy did not collapse. Yes, government support played a role, primarily funded by the Netherlands, but another major factor became evident—the sheer size of the informal sector. People kept working, earning, and spending, even if their incomes were not officially recorded.
Recently, the central bank announced an investigation into the informal economy. In other words, even our financial authorities admit we don’t fully understand our economy. A significant portion of money flows from illegal activities and money laundering. In construction and other sectors, under-the-table work is common.
So, does this mean poverty levels are actually much lower than official statistics suggest? In numerical terms, that’s likely the case. But relying on informal income doesn’t offer security or stability. People who lack a steady, legal income remain vulnerable. They exist on the fringes of financial security, and that uncertainty affects their place in society. In many ways, they are not just economically fragile but mentally impoverished as well.
Numbers alone do not tell the whole story. To understand poverty, we need to look beyond bank statements and acknowledge the realities of an economy that operates in the shadows.
Miguel Goede
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