Weak economy fuels illegal work in Saxony's trades, Dresden chamber warns
The Dresden Chamber of Crafts reports a surge in off-the-books work, especially in construction and barbershops, as a sluggish economy and high taxes push more activity into the shadows.
Alarm in Dresden
The skilled trades in Saxony are raising the alarm over a sharp increase in illegal work. Andreas Brzezinski, chief executive of the Dresden Chamber of Crafts, stated that the difficult economic situation is causing a boom in undeclared work, with the chamber receiving a growing number of inquiries and tips from member businesses. The construction and finishing trades, along with the hairdressing sector, are the primary areas of concern.
The difficult economic situation is causing illegal work to boom.
Regional divide
The perception of the problem is not uniform across Saxony. While the Dresden chamber is sounding the alarm, its counterparts in Chemnitz and Leipzig reported that they cannot currently confirm a clear increase in such reports. Volker Lux, chief executive of the Leipzig Chamber of Crafts, acknowledged that a weak economy generally strengthens the shadow economy, but noted the trend is not yet visible in their data. Barbershops remain a focus for inspectors in all three cities.
Causes and culprits
Brzezinski pointed to high taxes and social security contributions as a main driver, arguing they widen the gap between gross and net pay and make legal services more expensive. Joachim Ragnitz, deputy head of the ifo Institute's Dresden branch, supported this view, explaining that a weak economy creates fewer jobs, leading those without work to seek income in the underground economy. Ragnitz added that clients also save on value-added tax, making this a key incentive. He noted that while the tax burden is similar to past levels, real incomes have been stagnating for several years.
The client also saves the value-added tax. In this respect, this is probably the most relevant reason.
Enforcement efforts
The problem is well known to the main customs office in Dresden. Spokeswoman Heike Wilsdorf confirmed that construction and the hairdressing sector, including barbershops, are priority areas for inspections. The office's financial control unit for illegal work employs around 200 staff. In 2025, the Dresden customs office initiated 3,500 criminal proceedings for illegal work and illegal employment, plus more than 900 administrative offense proceedings, with a total estimated loss of around 14 million euros. The logistics, freight, hotel, and restaurant sectors are also considered vulnerable.
Quality and qualifications
The Dresden chamber also reported that some work is being carried out by businesses lacking the proper qualifications, with tradespeople taking on jobs reserved for other professions. The chamber cited the example of a bricklayer suddenly offering painting services. In the case of barbershops, authorities are checking whether the legally required management by a master hairdresser is being observed. The chamber recently convened a roundtable with customs, trade offices, and district authorities to push for more joint priority inspections.
