April 28, 2008 Commoners affected by underground economy Play video

(NECN: Latoyia Edwards, Chelsea, Mass.) - Everyone is familiar with some of the money problems facing the country, but Massachusetts Senator John Kerry says there's another problem people should be concerned about -- underground economy.

Kerry says the Bay State loses millions of dollars each year to companies who engage in paying people under the table -- or avoid certain taxes.

Kerry held a public field hearing at Bunker Hill Community College in Chelsea, Massachusetts Monday, titled "The Effects of the Underground Economy on Small Businesses and Workers," to talk about the problem.

The hearing examined the impact of employers who fail to abide by lawful hiring practices. Whether employees are paid off the books or misclassified as a "contract employee," companies are able to avoid paying certain employment taxes and benefits.

Massachusetts loses about $152 million in tax revenue due to the underground economy every year.