Construction is a $152 billion industry in California, employing 895,000 workers. One out of six construction workers in the Golden State, that is 143,900, sank into the informal economy in 2011. Informal construction workers earn about half of what their formal counterparts bring home and their households are three times more likely to live in poverty.
The informal economy produces legal goods and services that are not effectively regulated. Such activities can give rise to abuses by employers who fail to respect basic labor, safety, immigration, and tax laws, leaving workers without rights. By definition the informal economy is hidden "under the table" and "off the books." However, by comparing different sources of employment data we can identify industries where a significant share of jobs appear to be unreported. Industry characteristics such as worker demographics can also be used as an additional indicator of informal employment.