BERLIN, Jan. 8 (Xinhua) -- German companies are losing 300 billion euros (343 billion U.S. dollars) in turnover every year to illegal employment, a survey by the German Economic Institute (IW) published on Tuesday shows.
Especially small and medium-size enterprises (SMEs) in Germany are suffering from less business while larger companies with more than 250 employees are less affected, according to the representative survey of 853 German companies.
Almost a third of German SMEs, 27.5 percent, answered that they would record losses in potential revenues between 5 and 30 percent due to illegal work.
Germany's booming construction sector is hit particularly hard by illegal employment as every 10th company in the construction sector declared losses in revenues of up to 30 percent. Only 19 percent of construction companies surveyed said that they would suffer no losses by illegal work.
"In view of the current construction boom, it is alarming that over 80 percent of construction companies are suffering from illegal competition," explains IW business ethicist Dominik Enste, adding that the public sector could take countermeasures with improved tendering conditions and more effective controls.
According to the survey, German companies are in favor of stricter controls and higher fines to prevent illegal employment. 75 percent of companies surveyed want more frequent and more intensive controls by German customs authorities and around 67 percent want harsher penalties for violations of the German employment law.
In an international comparison, undeclared work in Germany is less common than in many other developed countries. On a long-term average from 2003 to 2018, Germany ranks 12th among the 36 OECD (The Organization for Economic Cooperation and Development) countries.
